[House Hearing, 111 Congress] [From the U.S. Government Publishing Office] DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES APPROPRIATIONS FOR 2011 _______________________________________________________________________ HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED ELEVENTH CONGRESS SECOND SESSION ________ SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES DAVID R. OBEY, Wisconsin, Chairman NITA M. LOWEY, New York TODD TIAHRT, Kansas ROSA L. DeLAURO, Connecticut DENNIS R. REHBERG, Montana JESSE L. JACKSON, Jr., Illinois RODNEY ALEXANDER, Louisiana PATRICK J. KENNEDY, Rhode Island JO BONNER, Alabama LUCILLE ROYBAL-ALLARD, California TOM COLE, Oklahoma BARBARA LEE, California MICHAEL HONDA, California BETTY McCOLLUM, Minnesota TIM RYAN, Ohio JOSE E. SERRANO, New York NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full Committee, and Mr. Lewis, as Ranking Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. David Reich, Nicole Kunko, Stephen Steigleder, Donna Shahbaz, John Bartrum, Lisa Molyneux, and Mike Friedberg, Subcommittee Staff ________ PART 5 Page Department of Labor FY 2011 Budget Overview...................... 1 Department of Education FY 2011 Budget Overview.................. 59 Department of Health and Human Services FY 2011 Budget Overview.. 145 National Institutes of Health FY 2011 Budget Overview............ 279 ________ Printed for the use of the Committee on Appropriations Part 5 DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES APPROPRIATIONS FOR 2011 ? ? ? DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES APPROPRIATIONS FOR 2011 _______________________________________________________________________ HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED ELEVENTH CONGRESS SECOND SESSION ________ SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES DAVID R. OBEY, Wisconsin, Chairman NITA M. LOWEY, New York TODD TIAHRT, Kansas ROSA L. DeLAURO, Connecticut DENNIS R. REHBERG, Montana JESSE L. JACKSON, Jr., Illinois RODNEY ALEXANDER, Louisiana PATRICK J. KENNEDY, Rhode Island JO BONNER, Alabama LUCILLE ROYBAL-ALLARD, California TOM COLE, Oklahoma BARBARA LEE, California MICHAEL HONDA, California BETTY McCOLLUM, Minnesota TIM RYAN, Ohio JOSE E. SERRANO, New York NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full Committee, and Mr. Lewis, as Ranking Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. David Reich, Nicole Kunko, Stephen Steigleder, Donna Shahbaz, John Bartrum, Lisa Molyneux, and Mike Friedberg, Subcommittee Staff ________ PART 5 Page Department of Labor FY 2011 Budget Overview...................... 1 Department of Education FY 2011 Budget Overview.................. 59 Department of Health and Human Services FY 2011 Budget Overview.. 145 National Institutes of Health FY 2011 Budget Overview............ 279 ________ Printed for the use of the Committee on Appropriations ________ U.S. GOVERNMENT PRINTING OFFICE 58-233 WASHINGTON : 2010 COMMITTEE ON APPROPRIATIONS DAVID R. OBEY, Wisconsin, Chairman NORMAN D. DICKS, Washington JERRY LEWIS, California ALAN B. MOLLOHAN, West Virginia C. W. BILL YOUNG, Florida MARCY KAPTUR, Ohio HAROLD ROGERS, Kentucky PETER J. VISCLOSKY, Indiana FRANK R. WOLF, Virginia NITA M. LOWEY, New York JACK KINGSTON, Georgia JOSE E. SERRANO, New York RODNEY P. FRELINGHUYSEN, New ROSA L. DeLAURO, Connecticut Jersey JAMES P. MORAN, Virginia TODD TIAHRT, Kansas JOHN W. OLVER, Massachusetts ZACH WAMP, Tennessee ED PASTOR, Arizona TOM LATHAM, Iowa DAVID E. PRICE, North Carolina ROBERT B. ADERHOLT, Alabama CHET EDWARDS, Texas JO ANN EMERSON, Missouri PATRICK J. KENNEDY, Rhode Island KAY GRANGER, Texas MAURICE D. HINCHEY, New York MICHAEL K. SIMPSON, Idaho LUCILLE ROYBAL-ALLARD, California JOHN ABNEY CULBERSON, Texas SAM FARR, California MARK STEVEN KIRK, Illinois JESSE L. JACKSON, Jr., Illinois ANDER CRENSHAW, Florida CAROLYN C. KILPATRICK, Michigan DENNIS R. REHBERG, Montana ALLEN BOYD, Florida JOHN R. CARTER, Texas CHAKA FATTAH, Pennsylvania RODNEY ALEXANDER, Louisiana STEVEN R. ROTHMAN, New Jersey KEN CALVERT, California SANFORD D. BISHOP, Jr., Georgia JO BONNER, Alabama MARION BERRY, Arkansas STEVEN C. LaTOURETTE, Ohio BARBARA LEE, California TOM COLE, Oklahoma ADAM SCHIFF, California MICHAEL HONDA, California BETTY McCOLLUM, Minnesota STEVE ISRAEL, New York TIM RYAN, Ohio C.A. ``DUTCH'' RUPPERSBERGER, Maryland BEN CHANDLER, Kentucky DEBBIE WASSERMAN SCHULTZ, Florida CIRO RODRIGUEZ, Texas LINCOLN DAVIS, Tennessee JOHN T. SALAZAR, Colorado PATRICK J. MURPHY, Pennsylvania Beverly Pheto, Clerk and Staff Director (ii) DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES APPROPRIATIONS FOR 2011 ---------- Wednesday, March 10, 2010. DEPARTMENT OF LABOR, FY2011 BUDGET OVERVIEW WITNESS HON. HILDA SOLIS, SECRETARY OF LABOR Introduction Mr. Obey. Welcome, Madam Secretary. I am sorry we had to delay this hearing for an hour because of the special meeting I was called to today. So, to try to put us somewhat back on schedule, I am going to forego an opening statement and simply welcome you here. I know you probably have the toughest job that any Secretary of Labor has had since the Great Depression. I wish you luck and anything else that you need to get the job done. Mr. Tiahrt. Mr. Tiahrt. Thank you, Mr. Chairman. Secretary Solis, welcome back to the Committee. It is always a privilege to receive testimony from a former colleague. During these tough times, it is an extremely important Cabinet position to hold. Madam Secretary, when I look back over this past year, I become quite anxious about where we are today, and even more concerned about where we are headed. Unemployment continues to hover around 10 percent, twice the level of structural unemployment. We are seeing record budget deficits and historic levels of debt, many State budgets are also deep in red, and households continue to tighten their belts. They are making very difficult decisions, but necessary, decisions on spending cuts, which is what they expect their Government to do. We have to work our way through this together and do so responsibly, and that does not mean that we spend our way out of this recession, as the distinguished Majority Whip said last month. I fundamentally disagree with that approach. In order to work towards a vibrant American economy in the 21st century, Congress needs to take a comprehensive look at policies and incentives which build solid economic foundation. This will not be accomplished by Federal funds, but by private capital which spurs innovation and leads to job growth. Lasting economic growth comes from the bottom up, and not the top down. Government does not create wealth. I think that is a misnomer in Washington today, that Government does create wealth. It does not. Government does not create wealth; the private sector does. And jobs are a byproduct of creating wealth. Our fellow Americans have been the victims of a top- down approach this past year. The Recovery Act was supposed to create 3.5 million jobs; yet 3.3 million jobs have been lost since its passage, including over 25,000 manufacturing jobs in Kansas. Kansas wants to get back to work. Kansas employers want to hire them. It is our duty to give them the tools and the opportunity to do so, not enacting policies that will only lead to a jobless recovery. FISCAL RESTRAINT Yet, these are macro issues, Madam Secretary, and it will take so much more than the Department of Labor alone to positively affect them. But it can start here, with this Committee, and it has to because it has not started with the Administration. President Obama promised a three-year freeze on non-defense, non-security domestic spending; yet, his request for programs under the jurisdiction of this Subcommittee have increased by $27,000,000,000. We need to do exactly what the President promised, but has so far failed to do: apply the scalpel to this budget request and make the tough, perhaps politically unpopular, decisions. There was an excellent article in the Wall Street Journal today about Ireland and how they are going to survive their red ink. The title of it is Irish Take Bitter Medicine to Survive the Age of Red Ink. ETA CARRYOVER I strongly support many of the programs funded through this bill; they are important for sustainable economic growth. But in these difficult times they call for fiscal restraint responsibility. Case in point--and I know the mere mention of this term, carryover, will cause many to sit upright, but consider the Employment and Training Administration. The entity was responsible for providing employment and training assistance programs and the administration of unemployment benefits; $2,500,000,000 of unspent funds was carried into fiscal year 2010, $700,000,000 more than you had estimated; $2,500,000,000 appropriated in fiscal year 2009 that was simply not needed. We all know the trillion is the new billion, but these are huge, huge numbers. Just because the practice is permissible by statute does not make it an appropriate use of taxpayer dollars. Again, tough but responsible decisions must be made this year, and we have to own up to them. CREATION OF GREEN JOBS Lastly, your budget request is premised on the notion of creating good jobs, a simple enough concept that we all support. And as these good jobs are created, I certainly hope that we do not fall into the same nebulous void as green jobs. Not only does the definition of a green job seem to be ever- evolving, but even the process by which we now calculate green jobs growth is flawed. Take Vice President Biden's December memo to the President entitled The Transformation of Clean Energy Economy. In it he cites that renewable energy investments would create 253,000 jobs and would ``support''--I presume he means save--up to 469,000 more jobs. But he footnotes these numbers saying, ``A project that employs one person for two years would count as creating two jobs.'' One person working for two years is two jobs. I do not buy this. We could say that one job per month for two years would be 104 jobs. I think it is just one job and we need to keep our calculations correct and have an accurate representation of job growth, because the American people deserve and need to know the real facts. So, Madam Secretary, I welcome you back once again, and I look forward to your testimony today. Mr. Chairman, thank you for your time. Opening Statement Mr. Obey. Madam Secretary, why do you not proceed? Summarize your statement and proceed to the questions. Secretary Solis. Thank you, Mr. Chairman, Chairman Obey and Ranking Member Tiahrt and members of the Subcommittee. It is a pleasure to be here again this year. Thank you for inviting me to discuss our fiscal year 2011 budget request, and I ask that my prepared testimony be entered into the record, as I will review the highlights with you. First, it is not possible to discuss next year's budget without acknowledging the immediate need to put Americans back to work. I am proud of the work we have done with the Recovery Act resources, which include providing nearly $50,000,000,000 in UI benefits to unemployed workers and assisting over 190,000 of them to maintain their health care coverage under COBRA; creating summer job opportunities for nearly 318,000 low-income youth and over 18,000 wage-paying community service jobs for low-income seniors; and providing training opportunities for demand health care jobs and emerging jobs in the new green economy, renewable energy. While these efforts are helping, they are clearly not enough, and at 9.7 percent, unemployment remains persistently and unacceptably high, and especially for those particular groups most affected. African Americans are suffering at 15.8 percent, Latinos at 12.4 percent. The situation is dire. And in the Native American communities it is even higher. I remain hopeful, however, that Congress will reach agreement on measures that will allow us to continue to assist Americans until the labor market fully recovers. Mr. Chairman, you recognized this need when you added funds last year for the Senior Community Service Employment Program. We moved quickly as a result and many low-income seniors did not need to wait for a jobs package to secure employment. But there is so much more that needs to be done, and some examples are: To further extend the safety net for those displaced and dislocated workers by extension of the UI and COBRA assistance, which I believe the House and the Senate are working on; to commit to $1,200,000,000 to ensure that a robust summer jobs program can be implemented to put the high number of unemployed youth to work to receive job training and education exposure; To jump-start our employment through a $500,000,000 investment through on-the-job training programs that can help small businesses and hopefully be incentivized to hire and add on more workers; and To add $300,000,000 to further support the oversubscribed Pathways out of Poverty and Energy Training Partnership programs that include employers in all of those partnerships. Our budget request will sustain those investments through programs that give workers the tools they needed to succeed in this new economy. I want to highlight some of the measures that will allow us to increase the skills of all segments of our workforce. For the first time in over a decade, the budget proposes a significant increase in funding for the Workforce Investment Act programs. However, the additional resources are also closely linked to reform. In keeping with the Administration's WIA reauthorization goals, a percentage of the funds appropriated for adults, dislocated workers, and youth will be reserved for two new WIA Innovation Funds to provide competitive grants to encourage the workforce system to test or replicate models that we know work to expand and improve services and results for their customers, namely, employment in the private sector. The budget also requests an increase of $45,000,000 for the Green Jobs Innovation Fund. And I can tell you from my experience with the Recovery Act competitions that the demand for green job training has been enormous, and it has come from the private sector. We have simply not been able to keep pace with the record number of applications, submissions that came into my office; and I believe this unprecedented level of interest calls for further investment, more resources. We are committed to linking this training with job creation efforts in green industries and expect our grantees to work with employers and other participants to gain those valuable skills and industry-recognized credentials that will help them move into better and higher paying jobs. In addition to the Youth Innovation Fund, the budget request includes an increase in other services for youth, such as $17,500,000 in the YouthBuild program that will allow us to extend this program and serve an estimated 230 competitive grants to local organizations to serve disadvantaged youth. We also expect to see benefits from fully integrating the Job Corps program with other youth programs and returning it into the ETA program. We are also undertaking a rigorous and comprehensive review of the Job Corps operations to identify any needed reforms that we might need to take. Good jobs for everyone means that other vulnerable populations must not also be left behind. That is why we are doing more to target resources to areas of greatest poverty, and that is why the budget request includes increases in the Indian and Native American and Migrant and Seasonal Farm Worker Programs. Two DOL agencies, ETA and the Office of Disability Employment and Policy, known as ODEP, will also receive $12,000,000 each to continue their job disability initiative to increase the capacity at our one-stop system to provide accessible services to individuals with disability. We know returning veterans, including those who are disabled, can contribute greatly to the expansion of our economy. They are the most under-utilized population. For the Veterans Employment and Training Service, the budget requests $262,000,000 and includes increases for homeless veterans grants and transition assistance programs which are vitally important for those individuals that are coming back and want to be reintegrated into our society. Our Assistant Secretary, Ray Jefferson, will be with you tomorrow to fill in any items or activities that you require more information regarding our Vets program. The ETA Assistant Secretary, Jane Oates, will also be here tomorrow to discuss any further plans and details you might have regarding partnerships that include the nursing shortage and also efforts to help provide assistance to States to pay for a paid leave program that we are now initiating. I know you understand that it can be too easy to exploit workers when jobs are scarce. We need to remain vigilant in protecting the rights and safety of all of our workers. In fiscal year 2011 the budget continues that vigilance by hiring additional enforcement personnel and strengthening our regulatory efforts. We build upon the resources that you provided last year to return our worker protection programs to the 2001 staffing levels or greater, after years of decline. To do so, the request includes $1,700,000,000 in discretionary funds for 10,957 FTE for our worker protection activities. This funding level is $67,000,000, 4 percent, and 177 FTE above last year's level, and the agency-by-agency details are in my prepared testimony. In discussing worker protection, I want to point out that the request also includes increases to support the development of regulations in areas such as pensions, worker health and safety. These resources will help reinvigorate the Department's regulatory program and are critical to the success of our worker protection agenda. The budget also includes an important interagency effort to address the issue of employee misclassification. Workers wrongly classified as independent contractors are denied access to critical benefits and protections in the workplace to which they are entitled, for example, overtime, health care coverage, worker's compensation, family and medical leave, and unemployment insurance. In addition to denying workers these protections and benefits, misclassification results in billions, billions of dollars of losses to Government through unpaid taxes. Our budget includes $25,000,000 to hire additional enforcement personnel targeted at misclassification to fund competitive grants to boost States' incentives and capacity to address this problem. Restoring our economy requires ensuring the world economy is also sound and balances. I firmly believe that our responsibility to promote acceptable conditions of work abroad is closely linked to our worker protection agenda here at home. It is with this goal in mind that we are requesting an increase of $22,000,000 in the ILAB program to increase the monitoring of labor provisions in trade agreements and to support programs that use innovative and successful models to improve the labor rights of workers in our trading partner countries. Mr. Chairman, it is thanks to your leadership that we have been able to pursue these approaches, which is based on highly successful garment industry projects that we have been working on in Cambodia. By increasing funding, we will be able to expand our reach of worker rights protections in additional countries. So I thank you for your previous support. Before I conclude, I want to say just a few words about our commitment to ensuring accountability for the resources that you entrust us with. This is why my testimony links investments to performance outcomes and why we have new commitment to program evaluation. Members of the Subcommittee, I think we all know that too many Americans are ready and willing to work. But we know that they cannot find a job. There are six applicants for each job that is available now. We know the urgency. The budget before you will help spur new and better job opportunities while fostering safe workplaces that respect workers' rights. That is what my goal of Good Jobs For Everyone is, and I look forward to working with you on making this vision a reality. I am happy to respond to any questions that the members of the Subcommittee might have. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8233A.001 [GRAPHIC] [TIFF OMITTED] T8233A.002 [GRAPHIC] [TIFF OMITTED] T8233A.003 [GRAPHIC] [TIFF OMITTED] T8233A.004 [GRAPHIC] [TIFF OMITTED] T8233A.005 [GRAPHIC] [TIFF OMITTED] T8233A.006 [GRAPHIC] [TIFF OMITTED] T8233A.007 [GRAPHIC] [TIFF OMITTED] T8233A.008 [GRAPHIC] [TIFF OMITTED] T8233A.009 [GRAPHIC] [TIFF OMITTED] T8233A.010 [GRAPHIC] [TIFF OMITTED] T8233A.011 [GRAPHIC] [TIFF OMITTED] T8233A.012 [GRAPHIC] [TIFF OMITTED] T8233A.013 [GRAPHIC] [TIFF OMITTED] T8233A.014 [GRAPHIC] [TIFF OMITTED] T8233A.015 [GRAPHIC] [TIFF OMITTED] T8233A.016 [GRAPHIC] [TIFF OMITTED] T8233A.017 Mr. Obey. Thank you very much. Mr. Tiahrt. GREEN JOBS Mr. Tiahrt. Thank you, Mr. Chairman. I want to talk just a little bit, ask you some questions about the green jobs. In the fiscal year 2011 request for increased funding for green jobs training, the request is for $45,000,000 over fiscal year 2010, for a total of $85,000,000, more than doubling its funding in one year. This would be in addition to the $500,000,000 provided in the Recovery Act. However, your latest Recovery Act execution report states that only $520,000 of the $500,000,000 provided for green jobs has been spent. These funds were provided 13 months ago. I am aware the obligation rate is higher, but I think it is important to focus on what has actually been injected into the economy. Money that is merely obligated does not provide the economic stimulus intended by the Recovery Act, and it certainly does not help the American worker. Furthermore, I am concerned about the push to create green jobs, whether they will actually have a counter effect. There is a Washington Post article about the smart grid, and that is considered to be one of the clean energy sector jobs growth. The author, who is the Director of GE Smart Grid Initiative, suggests that because the smart grid is premised on automation, more than 28,000 jobs of meter readers are likely to disappear. Now, maybe that is just the normal course of technology; we should accept that. But green jobs is kind of a novel concept. In the article he says that there are really four categories, based on what has happened in Europe, for green jobs when it comes to this smart grid: it is research and development, it is manufacturing, installation, and then information technology. Now, we are excited about the manufacturing side of it because we have to make things in this Country. If we do not make things, our economy is going to be stagnant. We cannot exist as a service economy only; we have to make things. So the manufacturing side of it is very good. In fact, we have a wind generating manufacturing facility owned by Siemens, a German company, in Hutchinson, Kansas, not far from my home. But when you look at the actual jobs that are residual or long-term for these green jobs, it is a minimal number. So I am concerned that we are overestimating the impact on our economy by green jobs. If you take into consideration the study done by King Juan Carlos University in Spain, they decided that for every green job that was created, the resources were taken from the private sector and actually cost 2.2 jobs in the private sector. So we had a net loss of 1.2 jobs, according to their estimate, in Spain for having a single green job. So taking resources out of the private sector to create these and subsidize these jobs may not be the best plan to get the economy rolling again. I am going to go back to this $500,000,000. So if you have not spent any of the $500,000,000 of the stimulus fund, how can we assess whether or not unemployed individuals have been able to obtain work through the so-called green jobs sector? DECREASE IN JOB LOSSES Secretary Solis. Thank you, Congressman Tiahrt, for your question. You bring up a lot of good questions here, and what I would like to begin with is, frankly, if we can all look back where we were in January and February of last year. We were losing well over 700,000 jobs a month at that time. This last month, one of the roles that I play in the Department of Labor is to have to issue what that job report is. I am happy to say that we have seen a very, very dramatic decrease in job loss; it went down to 32,000 jobs a month. However, I do want to say that we have a high, high number of people who continue to be unemployed and have been out of work for longer than six months. GREEN JOBS The green job programs that we have rolled out--and much of that money was actually released through a competitive process where we had--in each case, entrepreneurs, partnerships with different providers that were a compilation of community colleges, apprenticeship programs, but, more importantly, we had business involved. These efforts are to help create job training slots, and the idea is that the results of those partnerships come about because of the design of the grants' writers from the local area. Much of what is coming to us is by way of what the community sees as a need. So, for example, in a community that I visited in Tennessee, their interest was in looking at solar panels, looking at trying to change how work was done in the Sharp Corporation. They were doing televisions before; now they are doing solar panels. The owner of that property was telling me that they would like to see more help so that they can have a trained workforce to make that kind of transition. This is where I believe our partnerships will work in a better way to help focus in terms of what regional sectors are looking for. I know that there has been much debate about how many jobs we created, but I know that because of the Recovery Act we have seen more than 1.5 to at least 2.5 million jobs that have been created. That also represents people in law enforcement, teachers, people who are also working in construction and hopefully now beginning to get involved in those construction projects that are going to be rolled out through the infrastructure monies that were made available by the Congress. Mr. Obey. The gentleman's time has expired. Mrs. Lowey. And let me explain. I am going to try to hold each questioner to five minutes, so if members want long answers from the witness, they need to ask short questions. G-20 SUMMIT Mrs. Lowey. Well, I am delighted, Madam Secretary, to have you with us, and once again I want to congratulate you on your effective administration. We really are delighted to see you in this position. I know that you were very enthusiastic at the last year's summit in Pittsburgh when the G-20 leaders called upon you to host a meeting of employment and labor ministers in early 2010. The economic crisis that our Country is recovering from has been felt worldwide. So if you can tell us about this G-20 meeting, how it will help us solve the jobs crisis we face, I think it would be very helpful. Secretary Solis. Thank you, Congresswoman Lowey, and it is a delight and pleasure to be here with you as well. I know how deeply concerned you are with respect to foreign relations, and have watched you in action on the floor and always with the mind-set of how can we build our relationships with our trading partners; and under that premise the G-20 summit that is going to be held here in Washington for the first time, I think, is a very historic moment. To have our Administration actually present this idea in Pittsburgh and have, then, the buy-in from the G-20 labor ministers and all those parties to say yes, we want to come together. This is a global crisis. The economic crisis of job loss is hitting everyone, and more severely than our own Country; and I think this is an opportunity for us to be able to position ourselves once again to talk about some of the innovative things that we are doing and listen clearly to what some of the other countries are doing that may work better. But, more importantly, making sure that the U.S. can play a significant role in this effort. And I am very, very appreciative that we are able to get the support that we did in the last year's budget to help provide the foundation for the ILAB division under the auspices of Sandra Polaski. She is doing a tremendous job to help build upon those relationships that we saw that may have been very fragile in the last few years. And I am very excited about the opportunity, as I travel to other meetings representing our Country at the G-8 Summit, talking to other labor ministers there. They are very, very much engaged to see where our investments are; where that safety net, where those monies are going to help provide security for those dislocated workers and what kinds of new programs are being implemented to keep people on the job. Germany and other countries have very, very different types of approaches in how they address keeping workers on the job; they help to subsidize that salary and they actually give an incentive to businesses to keep those industries in place, unlike what we have been doing here. And I say that because they have had a tremendous manufacturing industry going there for many years, but they know that that investment cannot be lost easily, so they make sure that they try to attempt to keep dollars there. Those are things that we can learn from. So I am very excited to be able to pull together the labor ministers here, along with the Administration, to hear about some good innovative programs, but also bring together business leaders. So we are also bringing together the different chamber representatives, the manufacturing representatives, as well as labor, to talk about the kinds of ideas and what is needed most now in the world. So I take this very seriously and I am very pleased that the Department of Labor can finally play a role here. BUREAU OF INTERNATIONAL LABOR AFFAIRS Mrs. Lowey. Thank you. In the couple of minutes I have left, I know you have been proud of the work that the International Labor Affairs Bureau has done. Well, we have given you, I believe, the budget request--I do not know that the Chair has appropriated it yet--$22,000,000 and an increase which would be focusing on labor conditions in foreign countries, reducing child labor, protecting women's rights, maintaining our education, HIV/AIDS initiatives. Could you comment on the importance of that increase to accomplish these goals? Secretary Solis. I think these are very, very important investments that we are making. As I said earlier in my statement, we have been working with other international partners, including the International Labor Organization, the ILO, to look at what best practices we can offer to other countries that are perhaps having some trouble, with trade enforcement or labor relation protections. But, more importantly, how to try to bring up the quality of life for some of our trading partners. I think about the example in Cambodia, where an effort was made there to look at the garment industry and to try to bring all those industries in that part of the world together to set a better standard to protect their workers, provide better wages for them, and then allow for our markets and other international markets through the ILO to also become partners with them. This expands their economic base, which creates more jobs, and creates opportunities for the U.S. to import and export those goods from countries like Cambodia. We are trying to use that model in other parts of Central America. In particular, we are exploring discussions with El Salvador and Nicaragua. Mr. Obey. Mr. Rehberg. OSHA ERGONOMICS REGULATION Mr. Rehberg. Thank you, Mr. Chairman. I was going to ask a meaningful question, but our staff left to have his picture taken with Herschel Walker, and I had to decide whether to go with him. He is out in the hall. Welcome. Nice to have you back. Secretary Solis. Thank you. Mr. Rehberg. The majority put language in the bill last year to add a column in the 300 log for musculoskeletal injuries, and some of us kind of think that that is the first sign towards a movement towards doing something that we successfully stopped in 2001, and that was the creation of an ergonomics regulation. Does your Administration intend to reestablish an ergonomics regulation in the three years that you have left? Secretary Solis. Congressman, I do want to tell you that there is a lot of confusion surrounding this issue, and we have decided that we want to put this back in terms of gathering information, because we think it is going to be useful. Many businesses are required to report any injury anyway, and all we are saying is that we are going back to the 2001 practice. It does not mean that we are going to roll out an ergonomics standard---- Mr. Rehberg. So there is no intent at this time for the Administration? Secretary Solis. At this time that is not---- Mr. Rehberg. And you do not anticipate in the future a movement towards---- Secretary Solis. At this time I can tell you that that is not the direction that the Department is going in. It is more of a means and mechanism to help provide information to businesses so we can prevent injuries. We know worker's compensation premiums and what have you have gone way up. We think this is a way to help provide provision information. WORKER PROTECTION Mr. Rehberg. Over the course of 2001 forward, Secretary Chao was very aggressive in, one, enforcement; two, working on the things she promised to do, and that was create industry- specific guidelines; and, three, to continue ergonomic research. Could you report what the Department has done in all three of those areas? Are you still going to aggressively work on industry-specific regulations like the nursing home industry? Secretary Solis. I think that we are obviously trying to put the OSHA division back where it was in 2001, so one of our efforts is to try to make sure that we staff up, that we are not having to do things that really bog down the system; and we would like to try to streamline the system and get information out to businesses, as well as workers, so that we can prevent injuries. I think we will be taking a look at different regulations in more detail, and I would be happy to provide you and your staff that information. But at this time, we are trying to respond to what Congress has also made clear to us, that in the past, OSHA and the Wage and Hour Division have not been as aggressive in terms of going and seeking and investigating some of these problems that have been occurring. The GAO is very clear on that; the Congress, this Congress, has been very clear. So we are attempting to address those issues that have kind of landed on my lap now as the Secretary of Labor. [The information follows:] There are no specific plans involving ergonomics rulemaking at this time. OSHA is carefully assessing its best course for preventing work-related musculoskeletal injuries, which includes a review of the guidelines that have been published and the effectiveness of guidelines as a strategy to address work-related musculoskeletal injuries. The agency plans to continue to use the general duty clause, when appropriate, for enforcement when work-related musculoskeletal injuries occur. OSHA has also launched a recordkeeping National Emphasis Program (NEP), which will help ensure that musculoskeletal injuries are being recorded accurately by employers filling out the OSHA recordkeeping logs. A final rule will be issued in FY 2010 to revise the Occupational Safety and Health Administration's (OSHA) recordkeeping form to restore a separate column on musculoskeletal disorders (MSD) that was removed from the form in the last administration. Restoring this column will improve the workplace injury and illness data collected by OSHA and the Bureau of Labor Statistics (BLS). Having more complete and accurate data will further our understanding of work-related MSDs, which is certainly beneficial to any ergonomics research, and also better inform employers about ergonomic hazards in their workplaces. OSHA STAFFING Mr. Rehberg. Well, that is an interesting comment, putting the agency back. What was done to the agency, was the budget cut? Are there less employees? Secretary Solis. I would say to you that the priorities were much different. And in terms of, again, trying to address the issues that the Congress has put before us, we thought it was well worth our efforts to focus in on looking at how we can reduce the injuries in the workplace; minimize fatalities and injuries that cost business and our economy an even greater amount of money. Mr. Rehberg. Okay, I would like to see the research that has been done. It was promised that it was being done, and I am not sure I have ever seen that. Again, was the budget cut or are there less employees in OSHA that there were at the start of 2001? Secretary Solis. Over the course of the last decade, we did not see the same--how could I put it?--equivalent number of staffing that should have been kept up to pace. So again, what I am saying is that we are trying to go back to 2001 levels. There may have been priorities placed on other divisions and did not focus in on enforcement and protection, where the Congress has been stating very clearly for the past few years that they wanted to see more enforcement occurring. And because there were a lot of complaints that were made, that is where our focus has now been directed. Mr. Rehberg. So if we go back and compare enforcement pre- 2001, we will find there was more enforcement on an individual basis than there was from 2001 forward? Secretary Solis. I would say that there was more of a compliance approach to enforcement, which did not always result in changes in behavior in terms of prevention on the part of businesses and industry to make those corrections, to provide training, and to access new tools so that we could reduce the number of injuries in the workplace. Mr. Rehberg. Thank you, Mr. Chairman. Mr. Obey. The Chair would simply point out that the Chart shows that there was a decrease of 252 people in OSHA between 2001 and 2008, and within Federal enforcement there was a decrease of 146 people, or 8.7 percent. The percentage reduction in the entire agency was 10.2 percent. And for safety and health standards the reduction was 22 percent. Ms. Lee. RACIAL DISPARITIES IN UNEMPLOYMENT Ms. Lee. Thank you very much, Mr. Chairman. Good morning again, Madam Secretary. Good to see you. You are doing a great job. I want to thank you and your staff for being so accessible and for really tackling the tough issues of the economy and unemployment. It is very desperate out there, as you know. A couple of things. In the committee report in 2009, we had report language that addressed looking at what the issues were as it relates to racial disparities in unemployment as it relates to the structural issues and why this unemployment gap is so great between the national average and the African American and Latino communities. So that is one question I would just like to get an update for the record. And I want to thank your Assistant Secretary for Policy for working on this and for keeping me informed on this. EX-OFFENDER GRANTS Also, secondly, there was report language, I believe it was $20,000,000 for ex-offender funding that should have been put out for competitive grants for communities of color, for dropout, for ex-offenders, for making sure that these young people have the requisite skills to become employed; and I do not believe any of that has been spent yet. So have you issued guidance on that or what is the status of that $20,000,000? And that, I believe, was report language in 2009 also. Secretary Solis. Thank you, Congresswoman Lee. To begin with, I am also pleased that we now have my Assistant Secretary for Policy, Mr. Bill Spriggs, who is here behind me. He has been the individual that has been working on the request for that report that you issued some time ago. And I apologize that we have been so late in getting it fully together, but, upon his arrival, we found that we needed more data sets, more information so that we could have a more accurate picture of what is really taking place. That report had now left my office and has been sent over to OMB for review. We hope that in a few weeks or perhaps next month we will be able to issue that report to you. So I am pleased. And a part of it is, as you know, a staffing issue because we just were able to get the appropriate staff onboard. But, believe me, this is an issue that I am greatly concerned about as well. With respect to the ex-offender program, I want to go to that because I know that is of great concern to many members of this Committee as well. Ms. Lee. I believe it was the 2009 committee report that issued the report language for the $20,000,000 that would be allocated for ex-offenders and dropouts. Secretary Solis. Well, what we have done for the 2011 request is, to bring together these programs in a more meaningful way so that we can actually attack the issue of employment, because the hardest, I think, factor here is while we are trying to reintegrate folks back into society, the problem is really the barrier of employment. Once they are able to achieve employment and get the services they appropriately need, I think then we are on our way to recovery; and that is something that really has not been focused on as heavily in the past, it was actually more of a focus for younger offenders, which was more in terms of education, which I do not want to take away from, because we are going to keep that component, but when we talk about adult ex-offenders, it is really more about providing assistance so that they can help stabilize their immediate families that they return to in many cases, and part of it is making sure that we can find them jobs or help to subsidize a portion of that. So we are combining our efforts here and we are really trying to make it more strategic because we know dollars are limited. Ms. Lee. But have you issued the guidance for that $20,000,000? Secretary Solis. I think later this month, my staff tells me, it will be issued. Ms. Lee. Later this month. Secretary Solis. So we will work with you to give you that information, and then if there is any input that you want to-- -- Ms. Lee. Okay. Yes, because that is very important. I mean, we have it already and all, it is my understanding, we need is to hear from your office in terms of how to get that out, in terms of the competitive grants. Okay. Secretary Solis. Thank you. Ms. Lee. Thank you very much. Thank you, Mr. Chairman. Mr. Obey. Mr. Alexander. RATIO OF JOB SEEKERS TO JOBS Mr. Alexander. Thank you, Mr. Chairman. Madam Secretary, in your opening statement you said something about six applicants per job opening. How can we determine that? Secretary Solis. Congressman, that is the information that economists have reported, the ratio of job seekers to jobs is about six to one. I just saw a report earlier this morning on the news that said it actually went down a bit, to 5.5 to one. I cannot break that down for you, I am not an economist, but I can tell you that people out there are very much looking for jobs. And as I go across the Country visiting some of our programs and hear about the kinds of efforts that are being made for people to try to get into training programs that can upgrade skills so that they can be ready when the full-blown economy is back to speed, that is the urgency that I hear, and from employers. Employers want to know that that gap, the education gap for training, is slowly closing, because they cannot find, enough trained personnel ready for some of these jobs that they would like to hire out for. NUMBER OF FEDERAL EMPLOYEES Mr. Alexander. Can you tell us how many new Federal employees have been hired in the last year? Secretary Solis. I cannot tell you how many Federal employees, but I can tell you that through the Recovery Act monies, through the CBO, we know that there were anywhere from 1.5 to over 2 million jobs that were created; and not all of them were Federal Government, a lot of them were also in the State with respect to teachers, police officers, and also other various industries. And we are trying to do a better job in terms of the Recovery Act money and how to actually account for those jobs that are created. FOREIGN GOVERNMENT SUBSIDIZED EMPLOYMENT Mr. Alexander. When you were responding to Mrs. Lowey's question a while ago, you said something about the fact that you had been to some other nations and in some countries they actually subsidize employees, unlike we do here. Can you tell us what that means? Secretary Solis. Well, just as an example, in Germany I am aware that they provide substantial subsidies for workers that are in areas or industries that are going through economic crisis, the automobile industry as an example. And what they do is they make a concerted effort then to allow for that salary to be paid for by the Government. A portion of that is paid for, maybe two days as opposed to three days, so they do not lose that talented, skilled, crafted person. Those are ideas. And it is not just in Germany; there are other parts in Europe where that model has been used. Mr. Alexander. Thank you. Mr. Obey. Mr. Jackson. DOL BUDGET REQUEST Mr. Jackson. Thank you, Mr. Chairman. Thank you for the time. I want to thank my former Rayburn neighbor, Secretary Solis, and welcome her back to our Committee, and thank her for her testimony. Madam Secretary, during this tough economic period, and with unemployment hovering just around and under 10 percent, you have one of the toughest jobs in the Administration: putting people back to work. I read with great interest your testimony and I understand that we are under budget constraints as we write these appropriations bills. However, I find it incomprehensible that we are quibbling over about $14,000,000,000 in your discretionary budget. We spend close to $1,000,000,000,000 bailing out banks that do not lend to us and got us into our current financial crisis. My problem with your discretionary budget, at least from my perspective, is that it is not bold enough. I read the part of your testimony that provides and seeks to put significant resources back into employment and training to prepare workers for the 21st century. However, last week the House voted on a ``jobs bill'' which would provide tax incentives to businesses to hire more workers. I voted against that bill because I do not believe that tax incentives are the best way to create jobs. ADDRESSING CHRONICALLY UNEMPLOYED In my district--and I have been here for 15 years--I am deeply concerned about the chronically unemployed. In my district, there are three people for every one job, while in the northwest suburbs, around O'Hare Airport, there are three jobs for every one person. Just under $1,000,000,000,000 to bail out the banks, but for a fraction of that number, let us say $300,000,000,000, my math says that $300,000,000,000 could employ 7.5 million Americans at about $40,000 a year. 7.5 million Americans put to work at $40,000 a year is about $300,000,000,000, a fraction of the $1,000,000,000,000 that we spent to bail out the banks. Are not sometimes the simplest ideas the best ideas? What does your budget do to address the chronically unemployed? And my colleague who asked the question about how many Federal employees have been hired over the last year, if I had my say, it would be 7.5 million more Federal employees, doing everything from painting bridges to cleaning up highways, to cleaning up vacant lots across this Country. And I fundamentally believe that the Federal Government has a responsibility during these tough economic times to shore up unemployment and put the American people back to work. Madam Secretary, your budget, what does it do to address the chronically unemployed? Secretary Solis. One of the things I would like to respond to, Congressman Jackson, is that through the Recovery Act money, we were able to help, set a good foundation to begin this holistic approach to really trying to assist people that were out of the workforce, the dislocated workers, the folks who lost their jobs recently in the automobile industry, the financial institutions, people who were also highly qualified. We are talking about people that had different skills sets. Through our Workforce Investment Act monies, we made grants available just through the green job approach, the partnerships that we established, about $500,000,000 went there. And we are asking for a bump-up there because we think it works and we know that there is a big interest. We know that there are people out there that may have lost their job because the assembly plant or manufacturer is no longer here, and we are trying to get people identified to get the appropriate type of counseling and assessment that they need. We plan to make sure that our one-stops are more accessible and that these grants that we provide through the Workforce Investment Act--and that is something that I believe you will want to be involved in by helping us with the reauthorization--to really reach down and touch those neighborhoods and communities like yours that may not have benefitted in the past from these types of efforts and targeted funding. We also make a special attempt through our Pathways Out of Poverty program to identify high unemployment areas; of 15 percent and higher, that require people to come together, partners, business, community colleges, apprenticeship programs, CBOs, and stakeholders that have a better sense of where these individuals are that could obtain this job skill. Keep in mind our effort is to make sure that we connect the business with the job training. I do not actually create the job. What I do is bring partners together that then say, at the end of the program, we expect to hire so many people. We fund those slots. That is really what the Workforce Investment funds and the partnerships that we have been able to put together are focused on. But we try to make the best assessment to make sure that we are getting the people in, and it is taking a long time because we have had to change guidelines, we have had to change the way that we even bring people on to read proposals. Much of that had not changed in the past 10 years. And I do not have to tell you communities like yours and others have been left out, quite frankly, from many of these job training programs. So our attempt is to, look at green jobs, health care jobs, as well as careers where we think there will be continual growth. We have actually seen that is the one spot where we see that there will be job growth, where we can integrate our local communities to get into those entry level health careers. Mr. Obey. The gentleman's time has expired. Mr. Cole. JOB SECTORS FACING CONTRACTION Mr. Cole. Thank you very much. Madam Secretary, great to see you again. You and your folks in your Department probably see more data on what is happening in the labor force than anybody else in the Government. I am very curious. We know we have lost about 8 million jobs over the course of the recession, and there are a lot of articles now beginning to appear to suggest a lot of these jobs ``are not coming back.'' What are the areas that you think, frankly, we will not be able to recover in, the particular sectors or kinds of work that, looking forward, you suspect there will be considerably less of in the future than we had in the past? Secretary Solis. Well, thank you, Congressman Cole. That is a good question. One figure that I continue to see that is not recovering as quickly is obviously in construction, and a lot of it has to do with the housing industry and the fact that we are just not building more houses. We have inventory, in fact, an overwhelming number of houses that now are in foreclosure. So that is creating a strain in terms of that workforce. REBOUNDING JOB SECTORS I would say also that in manufacturing overall we are just finally seeing an up-tick. The most recent report, issued in February, saw about 1,000 jobs added in manufacturing. What I do see happening, the positive sign, is that businesses are bringing on temporary workers. But, when you talk about temporary workers, it is not the clerk; these are engineers, architects, very highly skilled individuals that are helping that business come back and hopefully, with the Recovery Act and all the funds that you all have made available, and with the credit and capital market changing its direction, that businesses will feel more confident in bringing people on. The health care industry, as I said earlier, helped to create about, I would say, close to 500,000 or 600,000 jobs this last cycle. I also see growth in IT technology energy efficiency, and the renewable energies. That is why I think other countries are taking full advantage of that and we should also be heading in that direction. And I know that there has been a tremendous amount of investments made by different Cabinet secretaries, Department of Energy, in our railway system, as well, high speed rail. If we can get those projects on the ground ready to go--and much of that money has already now been given to different States-- that is going to create jobs not just for the two-year period of the Recovery Act, it will go on for ten years because of all the other jobs that will be created around that rail system. JOB SECTOR CONTRACTIONS Mr. Cole. If you could just have somebody from your Department give me a list of where you really expect the contractions. We clearly are going to have a lot of very skilled people that do not have a future that you are going to want to redirect. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8233A.018 [GRAPHIC] [TIFF OMITTED] T8233A.019 SHORTAGES IN TRADITIONAL ENERGY INDUSTRY Let me ask you. You mentioned energy and I had a particular question about that. I am not one who is critical of the money going to training on green jobs; I see a lot of wind power sprouting up in my State. I think there is no question there is going to be a market there. But there are also pretty critical shortages now in what I call the traditional energy industry as well. We are now doing a lot more natural gas in a lot more places; it is a much cleaner fossil fuel. I can tell you it is hard to find people that know how to drill in Western Pennsylvania or New York now, or that have a lot of knowledge of that particular business. Plus, we have some shortages in our own industry. So while you are incentivizing the movement--and I think appropriately--of people into the so-called green sector, what are we doing to help the industries that have critical shortages that produce traditional forms of domestic energy? Secretary Solis. Congressman Cole, that is an excellent question. I have actually seen many of our programs training up again in the area of hard manufacturing, and I am talking about jobs that you just mentioned, welding as an example. I have been to some of our programs that we have funded and find very regularly that the business components out there in the industry are saying I cannot find a qualified welder. And the salary levels that they offer are anywhere from $60,000 to $100,000. If the public were made more fully aware of what the potential is, I am sure people would not mind relocating to where those jobs are, because they do pay very good salaries. And because we are going into, say, renewable energies, I think there are going to be more opportunities. I know that the folks that we have been working with in partnership in public and private entities know that this is where we need to move our training programs, and I am acutely aware of that and know that that is an important factor in our recovery. We have to bring back, also, some steady skill sets, but also that manufacturing base, and we have to have that workforce staying here because there are a lot of people that are retiring from those industries. Same thing in the coal mine industry; you see a lot of retirees. We are still going to need people to be trained to go into those mines. Mr. Cole. I know my time has expired. I would just urge you to look at these traditional areas too. Green energy is the new buzz word, but there are going to be a lot of jobs in natural gas going forward and it is going to be national in scope; we are going to be way outside of traditional areas where people will have some new opportunities that have not had them in the past. Thank you, Mr. Chairman. Mr. Obey. Mr. Honda. Mr. Honda. Thank you, Mr. Chairman. CONTINUING EDUCATION Again, welcome, Madam Secretary. It is good to see you. A couple of things just real quick off the top of my head. I really appreciated the allocation of $5,000,000 to San Jose State University, where we will be able to look at health care and biotechnology training programs, and the vision I think that you are providing the Department is we are doing a lot of innovation and a lot of emphasis on green employment and green careers, but in order to have the workforce there that support that also, we need to have higher education. Some of these other institutions are prepared to do that. One of the things that we did in Santa Clara County was have an AA program, a pilot program to have folks who were in the labor industry, laborers, who want to pursue a AA degree in contract managing. Where, before, those folks were always the ones who were managed, now they have that background experience and can take a traditional job that Congressman Cole had talked about and upgrade them and convert them into other jobs that are going to be in high demand, especially when we have more activities in the green industries. So looking at the AA, hopefully somebody in your Department might work with the education department to look at how we can link the AA to a BA into the four-year college, where they can continue their education and their life skills into something more productive. GREEN JOBS In terms of the green jobs issues, I think that if people visited Santa Clara County and Silicon Valley, that although we have companies like Applied Materials that make machines that allow us to have photovoltaic gadgets or panels or flat screens, the instruments that are being sold and made by this company have a ripple need that goes upwards towards folks who do work like design and do work like creating the machine parts. There are skilled laborers and skilled artisans out there that are necessary. So those are traditional jobs that still exist that need to be continued and supported. So a green job could support more than five other jobs that are necessary for them to do that. I just wanted to have some of our colleagues understand that there are supportive groups that are out there. Even Caterpillar. When you have heavy machinery, you just do not have one kind of worker. So I think that in the green area we are expanding our vision and making this a better place. And the term greener and green, I think that that is probably a good term to use because we have to have every individual in this Country, and globally, understand that we all have individual impacts on our carbon footprint, and collectively we need to be constantly aware of it. So in your Department I really do appreciate that constant attention to that, because otherwise, as a Nation, we are not going to be able to effect any changes in our attitudes. I have no questions, Madam Secretary, but I just wanted to feed back some of the things and observations I have had over the past few months. Mr. Chairman, closing comments. Folks asked me in my internet town hall meeting I had last night one of the interesting questions was that if these things are happening and we are creating more jobs, why is unemployment looking like it is getting more. And I think that those who understand the statistics is that people who are not in the job market are not coming back in the job market, so that is going to create a blip in that unemployment, and then it goes down as they secure jobs. So folks who would be negative, we need to just respond in kind to let people know the information, what it really means in real life and people's jobs and the situation in this Country. Thank you very much for your work, Madam Secretary. Mr. Obey. Mr. Moran. EMPLOYEE READINESS TO ENTER JOB MARKET Mr. Moran. Thank you very, Mr. Chairman. Let me just say ditto for all the nice comments that have been addressed to you, Madam Secretary. We are delighted you are in this position and we appreciate all your diligent efforts. I represent an area that has a preponderance of technology firms, a lot of jobs. We are in pretty decent shape relative to the rest of the Country. But we are trying to make the most of the employment training opportunities that are available for those who are underemployed or unemployed because we have a lot of jobs. So we want to bring them in to this knowledge-based economy. But the employers tell me that there is a very serious deficiency in terms of employment training programs that the Federal and State government operates; that, in fact, they cannot use the skills that are taught through these training programs. At best, if they find that somebody shows up every day, is reliable, that is one of the best indicators that they can hire them, but they have to hire them at pretty low entry level skill levels and, thus, compensation levels. And they tell me the problem in an area like computer skills, where the jobs are available, is that the trainers are really not up to speed on the computer skills that are needed; that in many cases the trainer is teaching what they knew when they last left the private sector and came in to be a trainer. And because the computer skills advance at such a rapid pace, what they know is kind of outdated, and they either do not have the inclination or do not have the time, really, to bring themselves up to speed on the latest technology. Can you address this? Do you think this is an unfair criticism or is it something that you have observed and are addressing? Secretary Solis. Thank you, Congressman Moran. You hit the nail on the head. In my travels across the Country visiting different workforces and workplaces, I often hear from the employer that it is very tough to find someone who is really prepared that they can hire right way with the set of skills that they need. Therefore, the need to have reform with respect to some of the programs that we operate in the Department of Labor and, we are proposing in our budget to provide some new and better methods of trying to make our systemic approach more targeted so that we really do get at what the business owner needs, and make sure that those skill sets are really going to lead to a good job, and are marketable and timely. So it is going to require, I think, a lot of support on the part of the Congress, as well, as we look at revamping the Workforce Investment Act, because we do have some traditional partners who have been used to doing things for the last decade a certain way, and many times those folks are not going out as they were intended to to really talk to the business community, the entrepreneurs, the new inventors of this new technology that is coming out not just in the green industry, but just IT overall. I think that one of the incentives that we want to use is reward those programs that can demonstrate that there are some good methods being used. We want to be able to replicate them and we want to support innovation. So I am very much interested in your ideas and would like to learn more about how we can work together to help craft these kinds of activities so we make this a more effective program. EXTENSION OF RETIREMENT AGE Mr. Moran. Thank you, Madam Secretary. I was not supposed to ask questions that elicited long answers, but that was a superb response. I have one other question. The President is putting together a group of people to address structural deficit problems and, invariably, they will look at entitlement programs, Social Security especially, and I am sure one of the recommendations is going to be that they extend the retirement age. Now, in my district, a significant portion of the workforce is not going to be bothered by that. In fact, I think they would welcome it, to be able to keep working until 70. The problem is that we have a cookie-cutter approach in entitlement programs, and people who work with their back and their legs and their arms all their life, they cannot keep working until 70. So what are you going to do for those 15 years or so when the body wears out? I mean, I really am serious about this. It is not fair to manual workers to extend that retirement age. But if we could come up with a more sophisticated retirement system that was more correlated to the physical, as well as the mental demands of various workforce classifications, then it would be fairer to extend the retirement age; people would be more comfortable. We would have a more productive economy and probably save substantial sums in our entitlement programs for retirees. Is there any research, any thought that is being given to that within the Department of Labor, Madam Secretary, that might help us in this difficult decision-making arena? Mr. Obey. The gentleman's time has expired. Secretary Solis. I would like to get back to you in more detail about what we are looking at in terms of approaches now in EBSA and also the PBGC, because we are really talking about retirement security too, so people do not have to stay longer in the workforce for those folks that work in very hard assembly line and very labor-intensive jobs. We are looking at some creative mechanisms there and I would love to work with you on that. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8233A.020 Mr. Moran. Thank you, Madam Secretary. And thank you for your indulgence, Mr. Chairman. Mr. Obey. Ms. Roybal-Allard. PROTECTING MIGRANT FARM WORKER CHILDREN Ms. Roybal-Allard. As always, welcome, Madam Secretary. Let me begin by thanking you for hosting a briefing last September at the Department of Labor on the serious issues confronting migrant farm worker children. Last year, as you know, I introduced the CARE Act to give the estimated 400,000 youth working in agriculture the same child labor workplace protections that safeguard children in all other industries; and I know that you have been a champion for a very long time of child labor rights, and I look forward to continuing to work with you and your staff on this legislation as it moves forward. But in the meantime, children in agriculture are not equally protected by our child labor laws. They work in the fields at younger ages for longer hours and under very dangerous conditions that would not be permitted in any other industry. For example, a Human Rights Watch study found that while there are only 8 percent of children in agriculture, approximately 40 percent of all workplace deaths and nearly half of all workplace injuries suffered by children occur in agriculture. Until the CARE Act is passed into law, these findings highlight the critical need for oversight and enforcement of our current laws, which at least provide some protections to our children. Yet, in 2005, the average civil penalty assessed by the Department of Labor was only $1,011, or just 9 percent of the maximum penalty for child labor infractions; and in 2006, of the 1,344 child labor investigations by the Department, only 28 were in agriculture. This lack of enforcement obviously gives employers little incentive to follow the laws that do exist to protect these children. Now that the Wage and Hour Division staffing has been restored to the 2001 levels, can we look forward to increased investigations and meaningful penalties for child labor violations in agriculture? Secretary Solis. Thank you, Congresswoman Roybal-Allard, and I also want to commend you for introducing your legislation, the CARE Act, and I want to applaud your work and the work of those that helped to work behind the scenes to bring this issue before the Congress. It is something that all of us deeply care about, and I certainly am putting forth as much effort as possible to see that our Wage and Hour Division, working in conjunction with the Migrant Seasonal Agricultural Worker Protection Act, or Field Sanitary Standards in OSHA, are all working together in a strong effort to focus in on combating child labor. The Wage and Hour Division is conducting training right now with our investigators; they are out in the fields so that we can detect and get those parties involved in this egregious behavior to understand that this is not the direction that we need to be going in. It is also working with stakeholders, with parents, and also with the community, and even religious groups and organizations that can help to provide more information. We are rolling out a campaign to provide assistance to those most vulnerable populations, which will include, by and large some of the farm worker and farm worker children. It is egregious that this goes on. I was very upset when I heard about the violations that were occurring in the blueberry fields up in the northeastern part of our Country, where young children of ages 5 to 8 were out picking blueberries, and parents were allowing their children not to attend school because they needed the money; and they were out there through contractors who would bring these folks in and kind of move them around different farms. Well, when I heard that news, I ask that there would be immediate action taken by our staff, and I am happy to say that we have been able to now begin a more robust process, because we have more field investigators and the staff, and even people who speak their languages, so we can ascertain actually what is going on on the ground without intimidating people and them not being fearful of sharing information, because you know that is a big barrier that we face also with this population. But I would tell you that civil penalties, I have a list and I can give you the details of where we have gone after some of these egregious cases just in this past year that I think would be noteworthy for you. And we know we want to work with you to continue this effort. EXPOSURE OF CHILDREN TO HAZARDOUS MATERIALS Ms. Roybal-Allard. Thank you. In May of 2002, the National Institute for Occupational Safety and Health issued a report recommending that more than half of the existing regulations pertaining to children working in hazardous jobs, such as those exposing them to pesticides and lead, be revised and 17 new regulations be added; and although the Department of Labor has taken some steps to amend non-agricultural hazardous odors, those pertaining to agriculture have yet to be put on the Department's regulatory agenda for updating. Given the dangerous conditions, again, that these children face working in agriculture, what is the Department of Labor's time line for reviewing and acting on the recommendations for this specific industry? Mr. Obey. Very short answer, please. Secretary Solis. I would love to get back to you on what our activity and our plan is, because it is something you know I care very deeply about with respect to pesticide use and hazards that find their way to our children who are forced to work in the fields. Ms. Roybal-Allard. Thank you. Mr. Obey. Mr. Ryan. Mr. Ryan. Thank you, Mr. Chairman. Thank you, Madam Secretary. Let me first thank you and your staff. We had a visit recently from Assistant Secretary Oates and just had a tremendous visit. We had some steelworkers who were having issues with unemployment and she was just terrific, and it looks like we have fixed some of the issues; and you and your staff were ahead of the curve, as always. So thank you for being so great. I wanted to just mention, one, what Mr. Cole talked about, natural gas. We sit in Ohio under the Marcellus Shale, which is a huge natural gas opportunity for all of us, so talking about the Pickens plan, as far as retrofitting diesel engines and buses and trucks, I think it is an opportunity for all of us to say this is a clean fuel, and areas like Northeast Ohio and Western Pennsylvania have an opportunity to really, I think, resuscitate some long-term chronic problems that we have had. LEVERAGING STIMULUS FUNDING I want to make a comment about the stimulus package, too, because there has just been so much said about it. You are someone, and this Administration, I think, believes that we need to make investments into our communities, and we were able to take some stimulus money, not just stabilizing police and fire and a lot of school teachers did not get laid off in my district because of money that came, but we were able to take $20,000,000 from the State to do some site prep work, move a rail line, and it leveraged a $650,000,000 investment from a French tubing company that does a lot of natural gas tubing. And I bring this up because I want you to bring back to the Administration and to your colleagues that you work with in the Cabinet that there are communities in our Country, as you know, that just do not have money to make deals go down. So whether it is training money or community development block grant money, we need more opportunities to make things happen when you do not have that local tax base to make deals work for businesses. So I just wanted to put a bug in your ear to bring that back. I know you believe in it, and we need to continue to recognize that community development block grants and those kinds of things are very, very important. I want to thank you for all that you have done for Ohio with green collar jobs and the training money that you have sent. We also are benefitting from some high speed rail lines that are going from Cleveland to Columbus to Cincinnati, and your money will come in handy to make sure that we have the workforce available to do that. So the stimulus package has been good to us. We need more, there is no question, but it has been good to us. REEMPLOYMENT OF HIGHLY-SKILLED WORKFORCE I have one question that hopefully you can touch upon. We have in our area a distressed auto community. We have lost a lot of very high-skilled work. A lot of high-skilled workers are unemployed now. What are we doing within the Department of Labor or in conjunction with the Department of Labor-Department of Commerce to take these very high-skilled people, engineers, people who have made companies like Delphi and General Motors a lot of money over the years? How do we take these people and help them start their own business? And I know that may not be directly related to the Department of Labor, but they are unemployed workers. I think there is an enormous amount of opportunity for them to get creative, especially with the green economy. They have a history in manufacturing and, as we heard today, five spinoffs for every one manufacturing job. We have to get back to making things in this Country. So how do we take these brilliant engineers from General Motors or Delphi and corporations like that and help them with business plans and opportunities to create their own businesses? Secretary Solis. Well, thank you, Congressman Ryan. It was very kind of you to mention some of the things that we have done out in Ohio. I have to give you credit also for having a great leadership delegation there; everyone working together, and also your governor. I was down there when we actually issued the $400,000,000 for that high speed rail, and I can tell you there were a lot of delighted people there in the room to see that there is going to be an investment made on the part of the Federal Government to jump-start a project that will last into the next decade. Job creation is what we definitely want to see. But to your point about how we can try to deal with the highly qualified workforce that is out there looking for jobs, you now have the privilege of also working with Dr. Ed Montgomery on our Department of Labor staff, who is addressing the whole automobile industry displacement, and what he has done is brought together the different Cabinet offices-- Department of Energy, Commerce, EPA--to try to put together plans regionally so that we can start structurally looking at how we get these dollars out to those most distressed areas; and yours is one that is on target for us to bring those resources. We know that capital still remains a big obstacle, making sure that there is more credit available. I think the President is moving in that direction to see that we can provide incentives for businesses, tax cuts, research and development, more assistance targeted in a fashion that will help to spur that innovation so that businesses will not think that they can just have maybe support for two years, but be able to make a plan for 15 years. So I understand clearly where your thought process is and would want to work with you more to see how we can maybe learn from some of the things that are happening in your State and share with other industries. We also have some issues in California with some of our auto plants that are closing there. If we can use those best known practices and share them, I think we can all win in the long run. We have other industries, for instance aerospace is affected and we would be at a disadvantage if we do not also do something for these highly skilled individuals. Mr. Ryan. Thank you. TRAINING FOR HIGH-GROWTH INDUSTRIES Mr. Obey. The gentleman's time has expired. Let me just ask two questions before we end the hearing. First of all, as you know, in the Jobs for Main Street Act, which we passed in the House in October, we provided $500,000,000 for Workforce Investment Act Youth Activities; we provided $750,000,000 for job training grants; and I am happy to see that the Administration has picked up both of those items in your statement that you made today. I do have one question about your choice of priorities, however. Can you explain the Administration's request to fund additional green jobs or green jobs training grants, when there is a more immediate need for additional health care professionals? And in that context, in the Recovery Act, Congress provided $250,000,000 for training in high-growth industries with an emphasis on the health care sector; and my understanding is that DOL received an overwhelming number of applications for those grants. Can you tell the Subcommittee what percentage of the grant proposals you were able to fund for those items and whether there are additional high-quality applications that were denied due to a shortage of funding? Secretary Solis. First of all, Chairman Obey, I do want to give you credit for your outstanding work in helping us look to where the high need areas are, and you did that for us last year in our budget. With respect to the over-subscription of grants that we received in health care, we received 800 applications, and I would say that a good portion of them, a large portion, were eligible for funding. But we did not receive the amount of funding to be able to go beyond 8 percent of that fully-eligible population of applicants that came in. We were only able to fund 55 awards. And I know that this is a very sensitive issue for you, as it is one for me. I recently visited one of our nursing programs that we provide assistance to in Sacramento, a community college program, and to hear the testimony that I heard from some of the students there that had to wait years just to get into an entry level position was mind-boggling. But these were the students that persisted and some, by accident, were actually able to get enrolled into the program. Many were already well above 21 years of age; one was even 50 years of age, but felt so compelled because of the need to get into these careers that pay well that we know we have a shortage of. I know that the Department of Health and Human Services has a more robust budget than I do in nursing, and we want to collaborate with them to see how we can work on improving and expanding this effort, because there is a shortage and I think this is something you and I can talk about and figure out a way to work together. Mr. Obey. We are really missing an opportunity if we do not recognize that possibility. IMPROVING JOB LOSS PICTURE Just one other point. With respect to the stimulus package, I frankly find it quite tiresome to be in an argument about whether or not the stimulus package ``worked or not.'' This is a pretty badly hand-drawn chart, but what it shows is that, beginning in March of 2008, this downward line represents the average monthly job loss that we were experiencing in the economy. This line represents zero job loss and, as you can see, by December of 2008 we were losing 750,000 jobs per month the last three months of that decline. Since then, we have had a steadily improving picture in terms of job loss, so that today, over the last three months, we have averaged 35,000 job losses each month. That is a 95 percent improvement. Now, it certainly is not good enough because we still have not reached positive growth in the economy, but before a ball can bounce, it has to stop falling, and that is pretty much what I think we were able to do with the Recovery Act. The bill was never large enough to plug the entire $3,000,000,000,000 hole in the economy that we were facing, but what it did do is soften the blow, lessen the pain, reduce the number of people who were losing jobs. And let us hope that we have enough imagination, enough luck, and enough help and cooperation between the public and private sectors to actually turn that into a positive job growth area in the months ahead. Conclusion But I thank you for your testimony here today. Sorry we had to delay you by an hour, but it is good to see you. Secretary Solis. It is good to see you. Thank you very much, Mr. Chairman and members of the Committee. Mr. Obey. You bet. [GRAPHIC] [TIFF OMITTED] T8233A.021 [GRAPHIC] [TIFF OMITTED] T8233A.022 [GRAPHIC] [TIFF OMITTED] T8233A.023 [GRAPHIC] [TIFF OMITTED] T8233A.024 [GRAPHIC] [TIFF OMITTED] T8233A.025 [GRAPHIC] [TIFF OMITTED] T8233A.026 [GRAPHIC] [TIFF OMITTED] T8233A.027 [GRAPHIC] [TIFF OMITTED] T8233A.028 [GRAPHIC] [TIFF OMITTED] T8233A.029 [GRAPHIC] [TIFF OMITTED] T8233A.030 [GRAPHIC] [TIFF OMITTED] T8233A.031 Thursday, March 18, 2010. FY2011 BUDGET OVERVIEW: DEPARTMENT OF EDUCATION WITNESS HON. ARNE DUNCAN, SECRETARY OF EDUCATION Chairman's Opening Remarks Mr. Obey. Good morning, everybody. Today we are pleased to have the Secretary of Education, Arne Duncan, to testify. Mr. Secretary, don't interpret the lack of Democratic members here as a lack of interest. We are having a Democratic Caucus on a new-fangled idea that we have been rushing at breakneck speed through Congress over the past year, so people are still having some last-minute thoughts on that, and that is where they are this morning. I assume they will be by shortly. But we are here today, of course, to discuss the fiscal 2011 budget. Let me say, Mr. Secretary, that I know you and I share the same goal of seeing every kid in this country having access to a school that can provide them with a top-notch education and produce a good strong skill set. In addition, I know that we both agree that the funds we provided for education last year in the Recovery Act were absolutely imperative and have been essential in keeping our schools from drowning. I am not so sure we are on the same page when it comes to immediate needs and priorities about how to proceed from here. The work of the Education Department is more critical than ever. Today we face record high unemployment nationwide, while State school districts and colleges are in economic crisis. Educational opportunity, at all levels, is our most powerful tool in helping the poor and the middle-class climb up the economic ladder. AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 The underutilization of our human potential in the United States imposes heavy consequences on our society: lower productivity, lower earnings, poorer health, higher rates of incarceration and less civic involvement. That is why I was pleased to participate in the efforts to provide an unprecedented $98 billion investment in education in the Recovery Act which, among other things, was responsible for creating more than 300,000 education jobs. But we need to do more, in my judgment. According to the Center on Budget and Policy Priorities, State budget gaps will total $180 billion in fiscal 2011 and $120 billion in 2012. The consequences of that for our education system are staggering, and the numbers are daunting. Twenty-nine States and the District of Columbia have cut K-12 services, even with the Recovery Act funds. In California, though I am always reluctant to cite that State because of their wacky budget process, aid to local school districts has been reduced by billions of dollars. Cuts to early childhood funding in Illinois will leave 10,000 children ineligible for services. Mississippi cut its fiscal 2010 K-12 funding by nearly 5 percent. In New Jersey, more than 11,000 students will likely lose access to after-school programs. And the list can go on and on. In light of all of this, in my judgment, we need to do more to help States and school districts weather this financial crisis, and I hope that the Administration will put the full weight of its efforts behind efforts to do so. We also should make sure that any emergency financial assistance is broadly distributed and available for purposes like avoiding teacher layoffs and keeping the lights on. SCHOOL REFORM I know you and the President are very focused on using Federal aid to promote certain types of school reform. I am certainly in favor of improving our schools. I voted for No Child Left Behind, though I had huge misgivings about the details, because I felt, as I said yesterday, that it was the President's first initiative out of the box and he deserved the benefit of the doubt and because I wanted to see reform. I get just as tired as anybody else of seeing non-performing schools and dull teachers. But, nonetheless, we can be for improving schools, but it seems to me that right now our most immediate problem is that school districts are drowning in red ink. As I said yesterday, I like to sail, but when the sailboat is sinking, my top priority would not be to put a new coat of varnish on the deck. I would want to protect the hull first. FY 2011 BUDGET REQUEST FOR EDUCATION Secondly, in the interest of brevity, let me skip that and simply say, on your 2011 Budget, that request includes over $3.5 billion for new and untested initiatives, for which you will control how the funding is allocated to State school districts and other providers. In times like this, we need to worry about our core foundational programs, which go out by formula and are widely shared across the Nation. A school district's ability to attract funds should not depend upon its capacity to write a grant application. ELEMENTARY AND SECONDARY BUDGET REQUEST I want to support this Administration in your education priorities, but not at the expense of reliable and predictable Federal support that thousands of districts across the country rely upon. Perhaps most troubling is the lack of any increase at all in Title I funds, which are broadly distributed by formula to all school districts in need. At the same time, the budget includes an extra $500 million to expand the Innovation Fund, which makes grants through competitions run by your Department. Similarly, it seeks to more than double the appropriation for Teacher Incentive Funds, even though your Department has yet to complete any rigorous evaluation of this 5-year-old program. Overall, in the Administration's budget, funding for ESEA, funding for formula grants go down by almost $700 million, while narrowly targeted competitive grant programs increase by $3 billion. It seems to me that is not the correct balance, particularly during these hard economic times when most school districts need immediate help. HIGHER EDUCATION BUDGET I also want to express reservations about your higher education budget. I believe that a more educated citizenry is vitally important to our economy, especially in our changing economy. But we need to make sure that a student's brain, not their bank account, is the only determinant on whether they can get a college degree. Would you put that chart up, please? We put this chart up earlier this week, and I want to emphasize it again. What the chart demonstrates is that a student who in the 8th grade was in the top 20 percent of performers in mathematics had a 29 percent chance of graduating from college if they come from a poor family and a 75 percent chance of graduating from college if they come from a rich one. That, in my view, is an indictment of our indifference to the needs of children who are stuck in low-income families and stuck in poverty-related schools. And it seems to me our number one priority needs to be to redress that imbalance. PELL GRANTS I would also say that a key tool to increasing access to higher education for students of modest means is the Pell Grant. These grants currently help over 8 million students get the college or technical education they need to qualify for a decent job. Over the past 5 years, this Congress has worked to increase the maximum Pell Grant award by $1,500. We are facing a real challenge in continuing that policy. The cost of maintaining Pell Grants at that level is rising. You have large numbers of students going back to school because they recognize the tightness of the job market, and they are trying to upgrade their skills. Unfortunately, as we look for a solution to Pell funding, the administration's budget leaves me somewhat confused. It proposes to somehow move Pell Grants over to the entitlement side of the budget. I have no idea how well that is going to be received by the Congress. But we understand that if enacted, the Higher Education Reconciliation Act would provide a portion of the shortfall that we are facing today. But even counting that funding, it still leaves a substantial shortfall, and we need the Administration's help in finding a solution. It is not just good enough to ask us for the money, without suggesting how it is going to be paid for. So, I hope you can explore those issues over the next couple of hours, Mr. Secretary. Ranking Members Opening Remarks Mr. Tiahrt, I would invite you to make whatever comments you think are appropriate. Mr. Tiahrt. Thank you, Mr. Chairman. I want to begin by thanking Secretary Duncan and Mr. Skelly for showing up today before the committee. Welcome to the committee. EDUCATION SPENDING AND BUDGET DEFICIT We all know that education is critical, and I think we can all agree it is very important that we give the tools to every child to achieve their view of the American dream as well as equipping our economy for the skilled workforce needed to keep us competitive in a global economy. To do this, we need a world-class education system that puts the needs of students, parents and teachers first, while partnering with our local schools. I know there are differences on how we intend to accomplish this, particularly when the Federal Government would continue hemorrhaging red ink under the President's budget as far as the eye can see. The deficit this year under the President's budget will reach $1.5 trillion and never dips below $700 billion over the next decade, while our national debt would nearly double, despite an economy that is projected to have recovered and the war in Iraq ended. Beyond the next 10 years, the current path is unsustainable, as spending on the big three entitlement programs will continue to consume all of the available resources under current law. So as we look at the Department's budget request, tough choices will have to be made. We are putting the burden of today's spending on the kids who will be working tomorrow. So we have a trade-off: a good education system with frills that the students have to pay off in the future, or a system that meets the needs to give them the tools so they can achieve their dreams without the frills. While I have questions and concerns about many of the specifics in the Department's budget proposal, I look forward to the opportunity to continue discussing with the Secretary and the members of this subcommittee how we can responsibly invest in educational excellence, both today and going forward. Thank you, Mr. Chairman. Mr. Obey. Thank you. Mr. Secretary, please proceed. Why don't you take 5 or 10 minutes to summarize your statement. And we will put the full statement in the record. Secretary Arne Duncan's Opening Statement Secretary Duncan. I will be brief. Thank you so much, Chairman Obey and Ranking Member Tiahrt, for the opportunity to appear before the entire committee today. I want to begin by thanking you for what you have done to keep America's teachers in the classroom and to keep America's children learning. The Recovery Act saved nearly 325,000 education-related jobs and another 75,000 non-education jobs at the State level, and that is just through our Department. This funding not only helped stabilize the economy and avoid a depression, but it absolutely averted an educational catastrophe. And, Chairman Obey, I want to personally thank you for all your leadership in making that happen. All told, we have obligated over $70 billion from the Recovery Act. We have $25 billion left, most of which will be out the door over the next few months. That money will help States balance budgets, help young people pay for college, and help drive the change we need in our classrooms to prepare our children for the jobs of the future. DEPARTMENT OF EDUCATION FY 2011 BUDGET REQUEST Let me turn to our proposed 2011 education budget. As you know, while most Federal spending is frozen, President Obama is proposing an historic increase in education funding. He understands that education is the key to our economic security, and even in these challenging times, he remains deeply committed to this issue. DISCRETIONARY FUNDING REQUEST The President is requesting a 7.5 percent increase in discretionary spending, from $46.2 billion to $49.7 billion. It supports our cradle-to-career agenda, from preschool through college. Our K-12 budget is focused on six areas, all of them about supporting students and teachers. COLLEGE AND CAREER READINESS ``College and Career Ready Students'' is our new proposed name for the Title I formula grant program, which we continue to fund at historic levels. The Title I program will also receive substantial Recovery Act dollars next year. We also propose more funding for School Turnarounds, from $546 million to $900 million, so we can continue to focus on the lowest-performing 5 percent of each State's schools. PROMOTING WELL-ROUNDED EDUCATION Second, because students need a well-rounded education, we propose a $100 million increase for learning programs beyond tested subjects like reading, writing, math and science, that is, for programs such as technology, the arts, foreign languages, history and other subjects. All told, we will request more than $1 billion next year to promote a well- rounded education. ENSURING PROPER LEARNING ENVIRONMENTS Third, student supports are needed to ensure a proper learning environment. Our budget proposes a $245 million increase over 2010 for a total of $1.8 billion to improve school climate, student health, student safety, parental engagement and community involvement. This includes continued support for the 21st Century Community Learning Centers program. We also want to work with the Congress to refine this program so that it lifts student outcomes and incorporates enrichment activities through community partnerships. PROMISE NEIGHBORHOODS We are also proposing a major investment in a new program modeled on the Harlem Children's Zone. It is called Promise Neighborhoods, and it seeks to transform whole communities with schools as neighborhood anchors. It provides wrap-around social services from birth through college for students and families at risk. RESOURCES FOR DIVERSE LEARNERS The fourth area of reform we are calling Diverse Learners. This includes students with disabilities who will benefit from a requested $250 million boost to the IDEA formula grant program. Like Title I, substantial IDEA Recovery Act dollars will continue to be available this year. Other diverse learning populations include English-language learners, which will get a $50 million boost under our proposal, and we are maintaining dedicated funding for migrant students, homeless students, rural students and Native American students. EFFECTIVE TEACHERS AND SCHOOL LEADERS The fifth area of reform is called Teachers and Leaders. No one is more essential to educational success than the person in front of the class and the person who is running that school building. This proposed budget seeks $3.9 billion, a $350 million increase, to elevate the teaching profession and get effective teachers and leaders into the schools that need them the most. We are also requesting a large investment in teacher and principal leadership programs so States and districts can recruit and train the very best people possible. We further support both traditional and nontraditional pathways into teaching so people from all walks of life can bring their experience and knowledge into the classroom. And our budget invests in programs to reward educators for raising achievement and working in hard-to-staff schools and subjects. COMPREHENSIVE CHANGE NEEDED The final area falls under the category of innovation. We are proposing almost $2.5 billion to increase high-quality charter and magnet schools and other autonomous public schools and to continue the Race to the Top and the Investing in Innovation programs. With so many children at risk of failure, America cannot accept the status quo. We have to be bold. The facts are both startling and disturbing. Today, 27 percent of America's young people drop out of high school. That means 1.5 million teenagers are leaving our schools for the streets. And this is a national problem, urban, suburban and rural. Our 15-year-olds rank 24th out of 29 countries in math. In science, 15-year-olds rank 17th. And just 40 percent of young people earn a 2-year or 4-year college degree, and the U.S. now ranks 10th in the world in the rate of college completion. We used to lead the world. We have flatlined. Many other countries have passed us by. We must embrace new approaches to learning and expand upon proven models of success. We must hold everyone accountable for results, and we must aim higher. Our States recognize the problem, and that is why 48 of them are working together to raise standards, and 40 of them, along with Washington, D.C., have developed bold reform plans in their bid for Race to the Top funding. And everyone who applied is a winner. Those good, courageous, tough conversations are happening around the country, and we are seeing huge progress. FY 2011 BUDGET AND ESEA REAUTHORIZATION We are also seeing considerable bipartisan interest--both in the States and here in Congress--in our reauthorization proposal. I would like to briefly touch on some of the key elements which are organized around three main goals: first, raising standards so the students truly graduate from high school ready for college or the world of work; second, rewarding excellence and growth; and, third, increasing local control and flexibility while maintaining the focus on equity and closing those stubborn achievement gaps. We believe that States do not need a prescription for success. States and districts need a common definition of success. And we need a better system of accountability. As you know, No Child Left Behind greatly expanded the Federal role in holding schools accountable. It required States, districts and schools to report test scores disaggregated by student subgroups, bringing much-needed transparency around achievement gaps. NCLB was right to create a system based on results for students, not just on inputs. But there are far too many perverse incentives, and we must fix that. NCLB's accountability system actually encouraged States to lower standards. It doesn't measure growth or reward excellence. It prescribes the same one-size-fits-all interventions for schools with very different needs. It also led to a narrowing of the curriculum and excessive focus on test preparation. And it labels too many schools as failing, regardless of the progress they are making. Our proposal will use student academic growth and gain as the measure of whether schools, districts and States are making progress. It is a fairer, more honest and much more useful indicator. Most educators say they want to be evaluated on growth, not proficiency. As I said before, our proposal supports a well-rounded education, not only by requesting more than $1 billion for the arts, science, history, languages and other subjects, but by allowing, not mandating, States to use these subjects in their accountability systems. Under our plan, we will reward schools that are making the most progress, and we will be tough-minded with our lowest performing schools and schools with large achievement gaps that aren't closing. All other schools will be given flexibility to meet performance targets working under their State and local accountability systems. SUPPORT FOR RURAL DISTRICTS COMPETING FOR FUNDS Now, we understand there are concerns that small rural districts cannot compete with large urban districts for grants, so here is what we will do: First, we will continue funding the Rural Education Achievement Program, also known as REAP. In our budget, it has not been consolidated with any other programs or funding streams. Second, we will look at competitive priorities for rural districts where it makes sense and is needed, and we welcome that discussion with you. We recently did exactly that with the Investing in Innovation Fund, the $650 million I-3 fund. Finally, we are also identifying foundations and nonprofit organizations to partner with rural districts. I have traveled to many rural areas in the past year and seen firsthand both the challenges they face as well as their capacity to address them. And I am confident that our Department can support rural school districts as they work to improve--and compete. So those are some of the highlights. I encourage you and your staff to review the blueprint for reauthorization which is now available online. PROGRAM CONSOLIDATIONS AND SAVINGS I want to make one additional point about efficiency and our obligation to taxpayers. In our proposed 2011 budget, we list $340 million in savings by cutting ineffective programs and eliminating earmarks. We also consolidated 38 programs down to 11 funding streams to reduce red tape and paperwork for local educators, and they have been very appreciative of that. The bottom line is that, between our budget and our blueprint, we have a coherent and comprehensive vision for education in the 21st century that builds on core values shared by Congress and by the Administration: high standards and better assessments, rewarding excellence with real incentives based on student growth, and a smarter, more limited Federal role that supports rather than directs State and local educators. STATE OF EDUCATION BUDGETS NATIONWIDE Let me just close by voicing my concern for education budgets around the country. Even with the remaining Recovery Act dollars, States are facing teacher layoffs, cutting school days and furloughing teachers to balance their budgets. For many States, that funding cliff arrives this July. I want to thank the House for supporting an education jobs bill. I appreciate that there is growing concern that the Federal Government cannot continue funding States indefinitely. But America cannot neglect its obligation to children now. Somehow, we must find a way to continue to support our teachers and principals, parents and students, so that we emerge from this difficult economic period stronger and better prepared for tomorrow. Thank you so much. I am happy to take your questions. PREPARED STATEMENT OF SECRETARY DUNCAN [The statement follows:] [GRAPHIC] [TIFF OMITTED] T8233A.032 [GRAPHIC] [TIFF OMITTED] T8233A.033 [GRAPHIC] [TIFF OMITTED] T8233A.034 [GRAPHIC] [TIFF OMITTED] T8233A.035 [GRAPHIC] [TIFF OMITTED] T8233A.036 [GRAPHIC] [TIFF OMITTED] T8233A.037 [GRAPHIC] [TIFF OMITTED] T8233A.038 [GRAPHIC] [TIFF OMITTED] T8233A.039 [GRAPHIC] [TIFF OMITTED] T8233A.040 Mr. Obey. Thank you. Mr. Tiahrt. Mr. Tiahrt. Thank you, Mr. Chairman. PELL GRANT PROGRAM COSTS Mr. Secretary, there is a huge rise in cost in Pell Grants since fiscal year 2007. The maximum Pell Grant award under the House-reported Labor-HHS bill was $4,150 per student at a total cost to taxpayers of about $13 billion. That represented an increase of $100 in the maximum award over the previous year. Since then, Congress has increased the maximum award to $5,550, the bulk of which is this committee's responsibility. Your request for that amount is an increase to $5,710, for a total cost of $36 billion. When you consider the increase for the amount coupled with the number of students, which in the last 4 years has gone up by about 50 percent, it is a lot of money that we are setting aside. How has the cost of this important program skyrocketed so much in just 4 years? Secretary Duncan. What we are trying to do is make sure-- and I think Chairman Obey's slide is very compelling. There are so many students around this country who want to go to college who, due to difficult financial circumstances, simply can't afford it. And we want to make sure that those dreams don't die young. I don't worry just about our seniors and juniors. I worry about those 9- and 10-year-olds around the country whose mom or dad loses their job or takes a huge pay cut, and they start to think that college isn't for them. We have to continue to invest. We have to educate our way to a better economy. If we simply stop subsidizing banks and put those savings behind Pell Grants, we can close that shortfall in the Higher Education Act. And the bill, I appreciate Chairman Obey and Chairman Miller for their leadership on that. If we choose to invest in education and stop subsidizing banks, we can do the right thing by the country. Mr. Tiahrt. And we are very proud of our institutions in Kansas, and especially around March Madness, I have seen some brackets where the finals is KU versus K-State. Secretary Duncan. I am picking Kansas. Mr. Obey. What are they playing, badminton? RISING TUITIONS AND COST TO STUDENTS Mr. Tiahrt. My concern is that, as we put more money and dollars in the system, it seems like the universities just bump up their tuition costs, and we end up with the kids in the same problem. By putting more money in the system, doesn't necessarily open the doors for them; as a matter of fact, it may be more difficult for them, because they don't get enough, they start borrowing money, and by the time they get through their 4-year program, they owe $100,000. Secretary Duncan. It is a great question. I share that concern. And it is really interesting. If you look across a couple thousand higher education institutions, you see folks doing different things. You see some with absolutely runaway costs, way above the rate of inflation. You see other universities going to 3-year programs, going to no-frills campuses, doing some very creative things. And I think our students and families are very, very smart, and they are going to vote with their feet. They are going to do their homework, and where the costs are out of control and the value is not there, folks are going to stop going. You have seen a number of universities start to go in the other direction, reducing costs even in tough times, going to 3-year programs, no-frills campuses. So I think our students and parents through the marketplace are going to help drive more universities to go where they need to. But where schools have runaway costs, I think you are going to see students and parents choose to go in a different direction. FINANCING PELL GRANTS AND DIRECT LENDING PROPOSAL Mr. Tiahrt. Well, we are going from $13 billion in fiscal year 2007 to now a total cost of more than $36 billion. That is almost three times the increase. My concern is, these kids are going to end up paying for this because it is borrowed money. It is money we don't have. Secretary Duncan. Again, this is money we can invest in students without going back to taxpayers for another dime. We simply stop subsidizing banks. So this is a real chance for America, I think, to get its priorities right. I think we have to stop subsidizing banks. If we can do that, we can invest unprecedented resources to make college more accessible and affordable for our Nation's young people. DIRECT LENDING PROPOSAL--TERMINATING LENDER SUBSIDIES The President has drawn a line in the sand. He says, by 2020, we want to again lead the world in college graduation rates. We have to educate our way to a better economy. Again, we used to lead the world. We have flatlined. Many other countries have passed us by. And making college more accessible and affordable is very important. There is a piece of that legislation that is something else called income-based repayment, IBR. Again, simply by stopping those subsidies to banks, we could reduce those loans and repay them at the back end. Mr. Tiahrt. Mr. Secretary, we just had Secretary Geithner here a couple days ago, and he is very proud of subsidizing the banks. And I don't think he is going to stop. It doesn't prevent our kids from having to pay back this borrowed money. I think you are absolutely right; we have to quit bailing out the buddies on Wall Street. It is tragic that our kids that are in school today, the kids that are going to qualify for these Pell Grants, are saddled with the burden of paying back not only the money that is being allocated for education now, higher education Pell Grants, but also what we paid to bail out the banks. We are overdrawn by $655 billion this year alone. We are going to have to start making some tough choices, and it seems like this is a dramatic increase. Secretary Duncan. Again, I think we are trying to make some tough choices. I agree with you. We are trying to make a tough choice to stop subsidizing banks and put that money behind young people. Mr. Obey. The gentleman's time has expired. Ms. Lowey. Mrs. Lowey. Thank you, Mr. Chairman. 21ST CENTURY COMMUNITY LEARNING CENTERS And thank you, Mr. Secretary, for your leadership and creativity. However, I want to ask you a couple of questions about the after-school programs. This has been very important to me and to many of our communities. The budget request includes $1.6 billion for the 21st Century Community Learning Centers program. So this appears to be the same as fiscal year 2010, but after I look closely, I realize that $10 million of the request would fund full-service community schools, and $3 million would stay at the Department to run a national competition. So it is actually a $13 million cut. Now, we know that after-school programs serve more children than 5 years ago. There are more children, however, unsupervised each afternoon. The demand for programs is higher than ever. In fact, parents of 18.5 million children not currently participating in after-school programs say they would enroll their children if one were available. Now, my constituents say that reducing funds for after- school programs is like pulling the rug out from under working families who are struggling right now. So I am not opposed to extending the school day, but it is important to delineate between extended day and after-school programs. The vast majority of after-school programs last until 5 to 7 p.m., whereas extended-day programs often run only until 4 p.m. After-school programs just keep children safe longer, giving them enrichment and education activities until their working parents get home. IMPACT OF ECONOMY ON AFTER-SCHOOL PROGRAMS There was a survey conducted by the Afterschool Alliance that looked at how the economy is affecting after-school programs. It found that 95 percent of after-school programs report that the recession is affecting their community. Approximately 6 in 10 programs report a loss in funding due to the recession; 86 percent say more kids in their community need after-school programs; and 83 percent report that funding for their program is less than secure for the next 3 to 5 years. So the gap between the proposed funding level and the authorized level of $2.5 billion leaves as many as 1.5 million children behind and many States unable to make new grants, and that prevents new programs from getting off the ground and turning away established programs looking to renew grants. AFTER-SCHOOL PROGRAMS So I would like to ask you three questions: One, why is the Department proposing to effectively reduce after-school funding by using these funds for other purposes, as good as they may be, besides funding 21st Century Community Learning Centers? How does extending the school day fill the gap between what would otherwise be accomplished through after-school programs? And given the obvious need for more after-school programs, did the Department consider increasing funding for the program? You have asked for an overall increase in the budget. So I would say, why didn't you increase these programs when the need is so obvious? I want to make it clear, I am not against extended-day, but I don't think it takes the place of the after-school programs. Could you respond? Secretary Duncan. Sure. Those are really powerful questions. Let me just say I got my start in education in my mother's after-school program. I was raised as part of that and ran my own after-school program for 6 years before I went to join the Chicago public schools. So, throughout my life, I have seen the extraordinary benefits. Our streets often aren't as safe as we want them to be. As you know, we have more and more children on their own after school, and whether it is two-parent working families or a single-mom working two or three jobs, those hours, I would say, not just 3 o'clock to 5 o'clock, but 3 o'clock to 7 o'clock, 8 o'clock, are times of high anxiety for parents. And we have to find ways to address that. Let me start talking in bold strokes and then answer your question specifically. We talk about what our priorities are. One of the six buckets is student supports, and the total pot there is $1.8 billion. That is a 16 percent increase. That is for after- school and extended-day. It is trying to create safe and healthy students, and it is this idea of creating more-- replicating the ideas behind Jeffrey Canada's Harlem Children's Zone to make sure we have entire communities that are supporting students, enabling them to---- Mrs. Lowey. Kid's Day does a great job, too. We have that in New York as well. Secretary Duncan. It does a great job. I will also tell you the President has requested an additional $1 billion if the reauthorization passes, and we want to put a large chunk of that money into after-school programs. So if that passes with Congress's support this year, there is another huge funding source. We are not looking to cut funding. We are challenging grantees to tackle both of those two things. Mrs. Lowey. Wait. You are not looking to cut it, but you are, for something else that is good. Secretary Duncan. Again, we are going to challenge grantees to do these things. I don't see these two ideas as in conflict. I think folks can work on these things together. Mrs. Lowey. How? Secretary Duncan. Community schools can integrate after- school programs. Mrs. Lowey. Where are they going to get the money? Secretary Duncan. Again, these are through the grants we are going to put out. So there is a chance here for folks who are being creative to add time. We couldn't agree with you more; we want to add more time after school. Mrs. Lowey. Okay, let me just say this: I think your extended-day, your other programs are all great and all wonderful, but in the meantime, there are over 1 million kids who will not be able to get services of after school. So what I would just say, and I am hoping we can work together on the budget, is, I might adjust those figures, because I think it is important to address the after-school program. And we are certainly willing to support your creativity and extended-day, and I am familiar with CIPS and all the others. So I hope we can work together on that. Secretary Duncan. Thank you so much for your thoughtfulness. Mr. Obey. Mr. Rehberg. Mr. Rehberg. Thank you. I want to thank minority staff for sticking around for my questioning this time. COMPETITIVE GRANT PROGRAMS AND RURAL DISTRICTS Welcome. Nice to have you. And if you haven't checked my biography, I am from Montana. I represent 147,000 square miles. And we wish we would be rural education, but we are not; 85 percent of my kids are either rural or frontier. I had lots of problems with the No Child Left Behind as well, but I always found the Administration and the Secretary of Education to be fairly amenable to changes, flexibility. So if I could make some suggestions: Moving to the grant program does not necessarily work for a State like Montana, because we just don't have the economy of scale. There aren't grant writers in these schools. They are so small, that we especially see it in other areas like fire grants. There are other grant programs within the Federal Government, and we have struggled. We have tried to do education programs to help them learn how to write grants. We even offered in my office to help them write grants. And to expect us to try to make up $12 million for our schools in Montana through grant writing is practically impossible. And I plead with you, don't move so quickly in that direction. TURNING AROUND LOW-PERFORMANCE SCHOOLS The second area is the Race to the Top. Once again, the four model categories you have created are nice, but the difficulty is they don't really reflect our kind of schools. It is not that easy for us to get rid of a principal, fire half our teachers, restructure the way you have done it. I guess if you could give me some assurances of your desire or willingness to be flexible, and can you work with the Rural Education Caucus that we have here in Congress to address some of the lack of flexibility in the creation of the models in the first place? Secretary Duncan. Absolutely. I had a wonderful visit to Montana and learned a tremendous amount. Mr. Rehberg. Did you fly, or drive around? Secretary Duncan. We flew in, and we drove around. So we got a good sense of the issues. We traveled with the Governor and spent some time with the State school superintendent. I went to Northern Cheyenne country as well. It was a fascinating day, and I got a lot from it. Mr. Rehberg. As you know, we did not, our Office of the Public Instruction did not compete for the grants. Secretary Duncan. They can come in, in the second round. To be clear, we are not looking for fancy grant proposals. We want to go where the need is, and we have been very, very clear about that. We are looking for folks who have a heart, who want to get dramatically better, who want to raise the bar for all children, close achievement gaps. Again, we are not interested in fancy grant proposals or consultants or anything like that. We just encourage everyone to put their best ideas forward. And please rest assured, we want to go where the greatest need is. SCHOOL IMPROVEMENT INTERVENTION MODELS In our proposals, I think you are talking about the school Turnaround model, the Transformational Model doesn't require you to move staff out. We can continue to have the conversation and be flexible with that model put in place. We thought about it to make sure in those rural communities where you---- Mr. Rehberg. Can those other models be added? You are not dead set on those four? Secretary Duncan. We can have that conversation. We had lots of conversations with rural superintendents about that model. We didn't just sort of come up with these models--which also include the Restart and School Closure Models--in a vacuum. There were a number of conversations there. Frankly, there was pretty good support. But if we missed something, we are happy to continue those conversations. Mr. Rehberg. That is probably the thing I hear most from the school administrators: It is not practical or does not work. Maybe you are hearing from other areas of the country that it does, but my rural administrators---- Secretary Duncan. Okay. We will continue to vet it. I will absolutely commit to you to continue those conversations. I have tried to travel throughout the country, so whether it is Montana, whether it is West Virginia, whether it is Wyoming---- HELPING STRUGGLING POPULATIONS Mr. Rehberg. Let me switch gears rather quickly because the one thing I liked about No Child Left Behind was the testing, but the problem was we didn't do anything once we had the test done. We know it is our Native American schools in Montana. Clearly, we knew it before we went in that is what it was going to show. But the money didn't follow the tribes, didn't go into the reservations. Now we are seeing the consolidation of those accounts within your budget proposal as well. How do you hope to address them specifically when you slip them in with the African American districts and all the other districts that are identified as some of the trouble spots? Secretary Duncan. Again, our budget proposes the largest increase in spending for education ever. And so we want to put resources everywhere. At the time when the President is level- funding most other domestic spending, this is a major investment. And that is how we see it, as an investment. There is huge unmet need around the country in every community, urban, rural, suburban, frontier, and we want to work as hard as we can to meet that need. Mr. Rehberg. Thank you, Mr. Chairman. Mr. Obey. Mr. Kennedy. Mr. Kennedy. Thank you, Mr. Chairman. Welcome, Mr. Secretary. CHARTER SCHOOLS IN RHODE ISLAND I wanted to just reiterate, my State being a small State, we have about the same size school district, if you will, as a major city like Dallas, about 160,000 kids. We have full implementation of charter school laws in our State. It has really been a partnership with the Speaker, leadership, and our superintendent, both in our biggest city and also our smallest community. All of the partners are signed on. We have an approach where we fully fund and hold accountable both our public schools and our charter schools, and we are prepared to defund both charters and public if they don't perform. We actually have criteria-based hiring for teachers, and we are putting teacher quality and evaluation into the system already. For that reason, we get a ``green'' just among the National Council for Teacher Quality, green for those that should be proceeding forward with the Race to the Top measurement. I just wanted to highlight that, just in case you are deciding who to give the money to. ADULT LITERACY I want to bring to your attention the notion that the collaboration, if you can just elaborate for us, the collaboration with the Department of Labor on literacy. We have in this country a growing challenge in terms of adult literacy. And you can't divorce a parent's literacy and the fact that that impacts their child's challenges in terms of learning. So I would like to ask you, in terms of your Innovation Fund whether you couldn't explain--I mean, a lot of these families, the parent can't get into college if they don't first have the basic skills. PELL GRANTS AND COLLEGE TUITION I want to echo what Mr. Tiahrt said in terms of the increase in Pell Grants. Frankly, I know this is politically not even good politics, but we ought to be spending this money on public universities and community colleges to make it go the furthest. The notion that we are spending it on Ivy League colleges that have no cap on expenditures and do not make the most of their dollars in terms of access to the average middle- class family to me is another challenge I think for the Administration to make the most of those educational dollars. If they really want to take on the status quo, that would be the way to do it. Because I have kids waiting for classes to get into the Community College of Rhode Island, and they can't do it because there is not enough money. And yet we are spending Pell Grants to go to the Ivy Leagues like Brown and other places, albeit they are great universities. But frankly, I want to see more kids go to higher education, get access to basic skills and higher education than spend this money on a bunch of Ivy League universities that don't need it. ADULT LITERACY AND TRAINING So if you could talk about the adult literacy challenges that we have and how you are going to work with the Department of Labor and Secretary Solis on literacy issues. Secretary Duncan. Thank you. It is a huge issue for us as a nation, and we think we have about 90 million American adults who need to go back to school to get basic training, to be able to take that next step. So we have had a very, very good collaboration so far with the Department of Labor. Secretary Solis has been a wonderful partner. I have as my Under Secretary a former community college president, a visionary, Martha Kanter, the first time in the history of the Department that a community college president has been in that position. We want to make a significant increase in community colleges. We think they are this unrecognized gem along the education continuum. And whether it is 18-year-olds or 38-year-olds or 58-year-olds going back to school to retrain and retool, in green jobs, community jobs, tech jobs, health care jobs, we think as families get back on their feet, the country is going to get back on its feet, and we think community colleges can drive a lot of that. We also recruited, who happens to be from your State, just an absolute superstar who works with Martha, Brenda Dann- Messier, who is a phenomenal leader, passionate, has devoted her life to this issue of getting adults the skills they need and the basic skills to be retrained. So a lot of hard work is ahead of us. But I want you to know we are absolutely committed. We have a laser-like focus on community colleges, and Brenda is just an absolute champion for adult literacy. Mr. Kennedy. Well, what are you doing to partner with the technology sector to provide these technology boards, if you will, so there is no stigma to people who may have literacy issues, they can learn both literacy for their job, but also basic literacy skills without people having a sense of maybe what the challenges are? Secretary Duncan. We have had great relationships with the community. Then we have conversations. Folks want to be part of the solution, so we are not seeing resistance. We are not seeing silos. We are not seeing egos, and I think we have a chance to get dramatically better. Mr. Kennedy. If I could suggest, if we could bring all of the technology CEOs to the White House, tell them let's get a cut rate and just get a bunch of these technology boards access to people so they can learn at their own pace and be able to get both the skills and literacy without people having a sense as to where they are, because there is huge stigma to literacy, I just encourage that. I also encourage Rhode Island in the Race to the Top. Thank you very much. Mr. Obey. Mr. Alexander. Mr. Alexander. Thank you, Mr. Chairman. Good morning, Mr. Secretary. STUDENT LOAN INTEREST RATES So it doesn't look like we just hate banks more than we love children, let's talk about the student loan program a little bit. What is the average interest rate today that banks would charge? Secretary Duncan. That banks can charge? Mr. Alexander. Yes. Mr. Skelly. For students, for subsidized loans, this year the interest rate students will get charged is 6 percent this year. It will be 5.4 percent as of July. It goes down for a couple more years. For unsubsidized loans, the rate is 6.8 percent. Mr. Alexander. So if we take it away from the banks and handle it in your Department, what will the interest rates be? Mr. Skelly. Under current law, the rates would be the same. The interest rates are the same for the Direct Loan Program and for the Guaranteed Student Loan Program. Mr. Alexander. So the students will be paying the same thing. So what we are doing is just taking it away from the banks because we dislike banks and we are going to put it in you, is that right? Secretary Duncan. It is a little more complicated than that. We have basically been subsidizing banks, and we bear all the risk. And the banks have had a very, very good deal for a long time. And they have, because they have had a good deal, right now, and this is a matter of public record, they are spending millions of dollars on lobbyists who are running around town. They are running ads in a variety of places. And we think, again, when there is so much unmet need out there, when middle-class, working-class families are struggling to go to college, for us to continue to put money into banks when we can put money into students---- Mr. Alexander. But if we are not going to let them have the loan at a cheaper rate, how are we benefiting the student? Secretary Duncan. Because of those savings by not subsidizing banks, we can put billions of dollars in increased---- Mr. Alexander. Is that what we are going to do? Secretary Duncan. Yes, sir. Mr. Skelly. In the SAFRA legislation, the legislation will be incorporated into the Reconciliation Act . . . Mr. Alexander. And we know that that money won't be spent in other places? Mr. Skelly. I was just going to say that the rates will revert to a variable rate under a lot of the proposals under consideration. There would be a drop in the student loan interest rate under current laws. EVEN START PROGRAM--FAMILY AND ADULT LITERACY Mr. Alexander. Okay. Let's go back and talk about something Mr. Kennedy was talking about. I, too, am concerned about adult literacy. I have been a proponent of Even Start, Head Start, those programs, and it is very moving to go into a setting and see an adult learn to read and write along with their children. I am afraid if you mix all of those programs in and put them under competitive bidding, that that program, Even Start, is going to get lost in the mix. Can you ease my concerns? Secretary Duncan. I will try to. I appreciate your leadership there so much. I am a huge fan of family literacy. Again, if we are trying to change children's lives, you have to change parents' lives. Again, this is something I learned growing up as part of my mother's program, that she makes parents come in and read with their kids, and helps them if they don't know how to read to their kids. And if you are really trying to change that child's life trajectory, you have to change what is going on inside that home. So I am a huge, huge proponent of family literacy. We increased the funding for literacy by about 9 percent, so we are putting more money there. Even Start programs, family literacy programs generally can absolutely have a chance not to just maintain funding, but potentially increase their funding. Mr. Alexander. Good. Thank you. Mr. Obey. Ms. Lee. Ms. Lee. Thank you, Mr. Chairman. Good morning, Mr. Secretary. TEACHER SUPPORT AND CHRONIC LOW-ACHIEVING SCHOOLS Let me first say I recognize change is hard, and this is an entirely new approach to our educational system, which is sorely needed, but I have a lot of questions about this new direction. First, I may as well say, probably one of the votes that I regret most is voting for No Child Left Behind, and I don't say that about many of my votes. Of course, I wanted to see it repealed, but it looks like you all are trying to fix it. But let me ask you a couple of things, because I am not so sure that the issue of teacher support--and I cite the example in Rhode Island where all teachers were fired. Historically, teachers have not had the resources. They have not had the support. And I look at your budget for counselors, you know; I look at all of the supports that need to be in the school, especially in low-achieving schools, schools in urban and rural areas where you have low-income students, the supports have not been there historically for teachers. So for schools now to have to race to try to help teachers teach and then have the punitive measures that you all have decided upon, such as what happened in Rhode Island, if they hadn't been able to teach the way we want them to teach, to me just seems wrong. Teachers should be the highest-paid profession in the world. Really. They are securing our future. We have historically had a problem with low teacher salaries, and that is an issue that needs addressing. We haven't had the type of counseling at our public schools that teachers need, nor the curriculum, nor the supplies, nor the computers, the technology. In my area, in Oakland, an entry level teacher is paid $37,000, but yet in a higher-income area, a teacher gets $45,000. Both salaries are much, much too low. It doesn't make any sense to put the onus on teachers, I don't believe. Teachers have families. They have children. So to say we are going to lay off or fire teachers if they don't perform is a bit shortsighted, rather than do what we need to do to support teachers in terms of classes. You know what all we need to do. Had your budget been in place before the firing of teachers in Rhode Island, what do you think would have happened? Secretary Duncan. Let us be just very clear on that situation. We have actually worked very hard, and the union and the district are going through mediation and working together. So this story isn't finished yet, and we have been very encouraged by that. You never want teachers to get fired. That is not what anyone wants. And these guys are going to continue to talk and work through this. It is a tough situation. It is a tough conversation. But we are very happy they are back bargaining, and we are hopeful for a good resolution there. These conversations are never easy at a school like that. Reading rates have gone up, but in math I think 7 percent of students are at math proficiency levels. So 93 of students aren't. A dropout rate of 52 percent---- Ms. Lee. Sure. In my district, we have schools that are very similar. HOLDING SCHOOLS, DISTRICTS AND STATES ACCOUNTABLE Secretary Duncan. So we need to work together. I think your point is very well taken. The partnership with teachers is hugely important. One of the many things I thought was broken about NCLB is to put all the onus onto teachers, and we are trying to say this is a shared responsibility. So for the first time we are going to hold not just schools but districts and States accountable. We are going to have a laser- like focus on equity. To your point, often--and Congressman Jackson knows this-- often, the poorest communities get the least resources. There are huge funding inequities---- Ms. Lee. That is all the time. FUNDING FOR LOW-ACHIEVING SCHOOLS Secretary Duncan. I lived on the poor side of the tracks for a long time. In Chicago public schools that were 90 percent minority, 85 percent living below the poverty line, we received less than half the money of wealthier districts, less than half of districts 5 miles north of us. And think about the compounded difference that makes over 12, 13 years of education. It makes no sense whatsoever. What we want to do is we want to be very, very creative. The School Improvement Grants, which haven't gotten much discussion, you know, Race to the Top is $4 billion and, School Improvement Grants is $3.5 billion. We have put all that funding on the table just for that bottom 5 percent of schools. SUPPORT FOR TEACHERS So teachers need more time to collaborate. They need more support. We want to fund that. I think we should be paying-- this is controversial--math and science teachers more. We have got a shortage of math and science teachers; and I think we need to reward them to work in disadvantaged communities, rural or inner-city, urban. INCREASED RESOURCES, SHARED RESPONSIBILITY So we are going to put unprecedented resources out there, and what we are going to do is say, with these resources, we have to challenge the status quo. Where we have dropout factories where 50, 60, 70 percent of students aren't graduating, we have to collectively do something better. So we are trying to make a huge investment there, but it has to be a shared responsibility. I absolutely agree. Teachers can't begin to do this alone. I always say, if children aren't fed, they can't learn. If children aren't safe, they can't learn. If children can't see the blackboard, they can't learn. So this idea of the student supports emphasis, trying to create the climate in school and in the communities, the Geoffrey Canada work around schools to give students a chance to concentrate and think about algebra, trig, and biology. We have to do all those things, and I promise you we are committed to doing that. Mr. Obey. Mr. Cole. Mr. Cole. Thank you, Mr. Chairman. PROGRAMS FLAT-LINED IN FY 2011 BUDGET Mr. Secretary, thank you for being here; and thank you for what you are trying to do. I think you have got really one of the toughest jobs in government, and you do it well. But, like everybody else, I have concerns; and I think I share the chairman's concern about not funding programs that we think work or flat-lining them and moving toward the competitive grant system. Because I think it is very difficult. You need certainty in education, and you need to have some sort of timeframe, and if every year you are sort of up for a grant you have got a lot of problems and a lot of concerns. But I want to ask you about some specific areas where you flat-lined programs that, frankly, are of great interest to me. There is no increase in TRIO funding, and one of the major aims appropriately is to try to help disadvantaged kids get through school. There is no increase in GEAR UP funding, which helps kids get to college in the first place, again, usually disadvantaged. These are programs I see in my district and in my State and I think work exceptionally well. I am concerned frankly--I remember your testimony vividly last year, and you talked about going to reservation schools and seeing the real needs and the real challenges there. But we are flat-funding tribally controlled, postsecondary career and tech institutions, and we are flat-funding Indian student education programs again. So if these are areas of real need-- and they are, and I know you recognize that--why are we flat- funding in all these areas and moving toward grants--which again I share some of the concerns voiced by several of the members on the panel. Quite often, these are institutions or student groups that are going to find it very difficult in competing at that sort of thing. Secretary Duncan. Again, just to be very, very clear, in the big picture, almost three-fourths of our budget is continuing to be formula based. So the overwhelming majority of our money will be formula based. We are moving some money in the competitive direction, and we want that money to go where the greatest need is. So part of what we wanted in the higher education bill was a college Access and Completion Fund so GEAR UP and TRIO and other programs like that would have a chance to grow and expand where they are doing a good job. We think we want to continue to go where the need is. Again, we are not looking at fancy presentations, not looking at fancy Powerpoints but where there is significant need and a real desire to get better. Those are the kinds of places where we want to invest. And we think we have to get dramatically better and address those dropout rates. If we just keep doing the same thing, I don't know if we are going to get the better results we need. That is the balance we are trying to strike. Mr. Cole. That is a fair point, Mr. Secretary. Although you could make an argument--particularly in the four cases I have mentioned--we are not doing better because those programs aren't anywhere near completely funded. It is not like every kid eligible for TRIO is in TRIO or every Indian kid who could be educated is getting that. So maybe we actually--sometimes we do need to do more of the same thing. We just haven't done enough. And it is very difficult, I think, when you show up and everybody wants to do something new and exciting and everybody wants to do something innovative and there are lots of good ideas, but there tends-- particularly in tough economic times---- And you are better off than most. As you say, the President has clearly made a decision here to try to give additional resources. I would have thought maybe in some areas at least this was an opportunity to catch up and to fund places that haven't been funded. These programs really do work extremely well, and they didn't get any increases last year. I guess $20 million for TRIO, which the chairman made available, that wouldn't happen. That wasn't in the President's Budget. INDIAN EDUCATION And, again, there is nothing here to reward or build on a program that is pretty good; and there is nothing directed again toward Indian kids, which are the most disadvantaged, lowest completion rate in high school, fewest--lowest percentage in college, lowest number of college grads of any ethnic group or racial group. I think those programs really need a whole lot more in them before we sort of start trying something new. INCREASED FUNDING IN CONSOLIDATIONS Secretary Duncan. And those programs that, you know, have a demonstrated track record of effectiveness, that are doing a great job, will absolutely have an opportunity to receive more funding. So that chance is still there. And in all of these areas often, you know, when agencies consolidate budgets, they use it as an excuse to cut. We actually increased funding in every single one of our buckets. So that opportunity is there for them. Mr. Cole. Well, I am somewhat skeptical, but we will talk about this more. Thank you, Mr. Chairman. Secretary Duncan. I appreciate your thoughts. Mr. Obey. Mr. Moran. Mr. Moran. Thank you, Mr. Chairman. GRADUATION RATES OF NCAA ATHLETES I am just reading an article here relevant to March Madness, which starts today. And I want to applaud the Secretary for pushing a proposal that if the NCAA teams are going to participate in post-season play, they ought to graduate at least 40 percent of their athletes. It doesn't seem to be a particularly high bar, and I am disappointed to see that Kentucky would fail, the number one seed, but it is disgraceful to only graduate less than a third of their players. And, likewise, Maryland at 8 percent; California at 20 percent; Washington, 29; Tennessee, 30. And the most disturbing thing is that only 20 teams graduated at least 70 percent of their African American players. I appreciate the fact that you are addressing this. We turn our back on these issues because we enjoy the entertainment of competitive basketball, but we are not doing any favors to these athletes. I don't know that you need to comment on it. You can if you want. REAL ESTATE MARKET IMPACT ON SCHOOL FUNDING The other thing, though, that I am very much concerned about, Mr. Secretary, is that we have a disfunctionality in the way in which we fund elementary and secondary education in this country. It really relegates the Federal Government to little more than gap filling or capacity building, as you know. It is going to be particularly exacerbated, given the real estate market. We were told by our three principal economists this week real estate values are going to continue to decline. The principal way we fund elementary and secondary education is through property values, and the people who pay the most in property taxes are the least likely to send their children to public schools. They are the least likely to have school-age children, and if they do, they send them to private schools. Here you are with all of these initiatives, but you are bringing them out at a time when real estate values are not going to recover, where, despite what you are tying to do, the likelihood is that schools are going to have to continue to eliminate teacher positions, administrators, and the like because we don't fund public education in a manner that would give us a national workforce that is capable of competing globally. And you may want to discuss that. Unfortunately, the decline in real estate values is going to be particularly exacerbated next year because the stimulus bill runs out. So do you want to comment on that, Mr. Secretary? EDUCATION FUNDING AS INVESTMENT IN NATION Secretary Duncan. I will comment on both of your points, and I couldn't agree more and just appreciate your moral leadership on this. As a country, we dramatically underinvest in education; and we do it at our own peril. And, again, I don't see this as an expense, I see this as an investment. You could take the poorest child from the toughest community with the toughest home situation and you put that child in a great early childhood program and send him to a great elementary school and put him in a serious high school, and that child is going to be very, very successful. There is a school that we started in the heart of the toughest community in Southside. Inglewood High School used to have a 60 percent dropout rate. It just made the national news. Started a new school, all young men, 141 graduates--I think 107 graduates all going to 4-year universities. You give students from tough communities great opportunity, and they can do well. Other countries simply invest more than we do, and we are paying the price for that. So what we want to do is continue to push as hard as we can to make sure that scarce resources are going to education; and the more we can demonstrate success and that we are getting better, the more I hope people will see this is the right investment to make. But we have to educate our way to a better economy. DISPARITIES IN NCAA GRADUATION RATES Quickly, on the NCAA, it is not just the graduation rates but, to your point, the huge disparities between white ball players and African American ballplayers. I grew up with too many players who got used by the universities, made millions of dollars off of them. No one cared about their education; and when the ball stopped bouncing for them, they had very, very tough lives. So that is something that scarred me from the time I was a little guy, and to be in a position now to try to speak out against that---- What is interesting is so many universities do the right thing. There was an article in the New York Times on Xavier University that has a phenomenal 77-year-old nun who is in charge of academic affairs, and they graduate 100 percent of their players and have for decades. This is all about effort. It is all about culture. And you have other places that simply want players to entertain and to make them money, and they care nothing about their lives beyond that. And that is what we have to challenge. Mr. Moran. Good for you. Good point. Thank you, Mr. Chairman. Mr. Obey. Mr. Bonner. Mr. Bonner. Thank you, Mr. Chairman. Mr. Secretary, I agree with really all of my colleagues and especially Mr. Cole. You have got one of the toughest jobs in government, and we wish you success. NATIONAL EDUCATION POLICY DISCUSSIONS This is not the right place to make this request, but, Mr. Chairman, I would really like for us to think about one day if we could impose on the Secretary's demanding schedule allowing us to have a conversation where we could talk about local issues. Because we are all mentioning--or most of us are mentioning--things that we know from our congressional district that are important to us, and I am going to do that in just a second, but also where we could talk about national policy. Because it would make for an interesting debate if we could just focus on national policy versus things that are near and dear to our hearts. But, again, I won't make that request at this point. I would just throw it out for your consideration. But let me bring a local matter to my State to your attention and just ask for your input. I did not vote for the stimulus bill, although I have admitted multiple times that one of the good things that it did was it helped save thousands of jobs, tens of thousands of teachers' jobs throughout the country, including in my district; and I have told teachers in my district that that was one of the things--I don't know that it has created any new jobs in any district, but it certainly has saved some jobs. FORMULA-DRIVEN STIMULUS BILL FUNDS But one of the areas of concern in Alabama is we have three schools, a school for deaf and blind citizens, we have a school for math and science, and we have a school for the fine arts. The fine arts school is in Birmingham. The deaf and blind school is in Taladega. Those are not in my district. The school for math and science is in my district. Unfortunately, because they are not subject to the annual formula of our State legislature but through direct appropriations of the legislature, they did not receive any assistance from the stimulus bill. And knowing firsthand about the school for deaf and blind and also the school for math and science, these are good schools, residential campuses that serve the entire State of Alabama. Is there anything that we can do to try to make sure that they are included and not excluded from these formulas? HELPING SCHOOLS NOT IN FORMULA CALCULATIONS Secretary Duncan. I think there is. Your State of Alabama received $1.16 billion, and I have had a great working relationship with your Governor, and I think we have saved a very significant number of education jobs in a State that has been critically important. I was in Selma, Alabama, 2 weeks ago. Mr. Bonner. That is where I was born. Secretary Duncan. It was a very moving experience and one of those amazing days. Tom Skelly can walk you through--I think we can help. Tom, why don't you walk him through what is possible here? STATE FISCAL STABILIZATION FUND Mr. Skelly. Mr. Bonner, I know there were some questions about the schools there in Alabama, and we looked into it for your office earlier in the week. It turns out that you can use the government services portion of the State Fiscal Stabilization Fund. It is just the education portion that is restricted to programs that Alabama funds at the local level that are elementary and secondary education programs. The school for the deaf, the school for the blind, the fine arts school, those still could be funded through the government services portion. Mr. Bonner. And, unfortunately, my State is like 46 or 47 other States. I think Oklahoma and North Dakota are the only two States that I know of that actually aren't facing severe economic crises. So I am afraid that our State has already tapped into the fund, Mr. Skelly, that was available. But that is our problem, not yours. And I certainly acknowledge that, and I appreciate that. TAX CREDIT FOR PRIVATELY SCHOOLED STUDENTS Let me throw a crazy idea out from left field just for your opinion. The chairman said in his opening comments--and he is right--our schools are drowning in red ink, but our Federal Government is drowning in red ink as well. And would it be totally off the wall to consider--and I know this would be a tax issue, which doesn't come before our committee. But just your personal thoughts, Mr. Secretary, as a leader in education reform--for us to consider putting on the table a tax credit for families who send their kids to private schools or parochial schools or who home school? Because these kids are getting an education through a different means, but their families continue to support public education with their taxes. How crazy an idea is that? Secretary Duncan. I guess my primary concern is the vast majority of students in our country go to traditional public schools and I worry about how desperately underfunded our current public schools are. So my honest answer is my first priority is we need to do a much better job of supporting and investing--holding accountable for results, but investing in those public schools that serve the overwhelming majority of our country. Mr. Bonner. Thank you. Thank you, Mr. Chairman. Mr. Obey. Mr. Jackson. Mr. Jackson. Thank you, Mr. Chairman. FISCAL CONSTRAINTS ON NATION'S SCHOOL DISTRICTS Mr. Secretary, welcome back to our committee. It is good to see you. I have a couple of global questions, and then I want to ask a couple of specific questions in the time that has been allotted me. We really have two processes here in the Congress. Today, you are here before our committee presenting your fiscal year 2011 budget, which represents substantial increases in education. You have correctly stated that it is the most aggressive investment in education in recent memory. But the context for which you seek to change public schools and our Nation's education system is obviously in the context of the worst economic recession since the Great Depression. Detroit public schools are in near collapse. They are expecting to close almost 40 schools this summer. The Chicago public school system, Ron Huberman said in yesterday's paper, I believe it was, that 37 students per class will not be an unusual size if these budget negotiations don't go well. But the expectations are that they will not go well, that the pension obligations, the local property tax issues, the inability of local taxpayers to shoulder the burden suggest major changes in the Chicago public school system. There are two processes. There is one process that shows your very aggressive budget that seeks to change the Nation's education system in the current economic context, but the other process is the supplemental process that ushers truly the Nation's priorities, whether they be for Afghanistan and Pakistan. FEDERAL VS. LOCAL SHARE IN EDUCATION FUNDING The supplemental process bailed out our Nation's financial institutions, as carefully articulated by the President. I am wondering, in light of the fact that the Nation's top 50 school systems are experiencing shortfalls in revenue and, as the chairman indicated, drowning in red ink, why there is no emergency supplemental request by the Department of Education to provide relief for the major school systems that are near collapse by summertime. There will be no other process between now and the election, now and next year, to avoid many of these local disasters, and I am wondering why no supplemental request. Secretary Duncan. Obviously, Congressman, as you know, education in our country is primarily a local issue; and we are trying to help in every way we can. We provide usually 8, 9, 10 percent of funding. Most of the money comes from the State and the local level. It breaks my heart to see some of the decisions that folks are having to make out there; and, as you know, those are my colleagues and peers. Those are folks I work closely with. Situations are different in different places. A place like Detroit has seen declining enrollment for a long time, hasn't had strong leadership, has put off tough decisions. I am actually very hopeful about where Detroit is going. They have a phenomenal leader there I think now who is doing a great job, who is getting their fiscal house in order. You had tremendous mismanagement there, adults using the system for their own benefit, not for students. And I have said repeatedly, Detroit, you know, may be ground zero; and we are going to do everything we can to support what they are doing and where they are going financially. Robert Bobb is financially---- Mr. Jackson. I understand Mr. Secretary. No disagreement there. I don't meant to cut you off. My time is obviously limited. But why no supplemental request from the Administration, which is now prioritizing education, to address the red-ink issues in the top 50 school systems just as we are looking at the red-ink issues for the banking sector? Secretary Duncan. I hear the thought. I hear the concern. And it gives me something to think about. Mr. Jackson. It is hard to imagine that it is a priority if we are not looking at the only vehicle that is leaving the station from the Administration. I have been watching the news the last couple of days that, while Congress is bogged down in a health care debate, which hopefully will end soon, the Administration seems to have already moved to education; and yet the vehicles that are leaving the station to address these areas are very, very serious; and they have enormous ramifications at the local level. And I am sure that and I hope that you will take my concerns seriously. ADDRESSING LOW GRADUATION RATES OF NCAA ATHLETES I also want to ask a law, rules, and regulations question that followed what Mr. Moran indicated about the number of athletes that are graduating from NCAA schools. I am seriously hoping that you would use your good offices to seek a meeting with the NCAA and demand from them rules and regulations that provide the necessary tutoring and the necessary academic support for athletes not as a goodwill gesture or some hope that they will, but with some teeth. We have been discussing this too long, and the millions of dollars that basketball players make for many of these March Madness schools and the fact that they have shameful graduation rates, you would think that some of that money would go towards providing them with tutors, with mentors, with people to help them graduate and understand the significance of graduation. But it just seems to me the Secretary of Education's office should be honcho'ing with the NCAA such rules and regulations. Your thoughts on that, Mr. Secretary. Secretary Duncan. I spoke before the entire NCAA commission 2 months ago--I mean, the entire NCAA delegation, a couple thousand people, 2 months ago and said exactly the same things. We do plan to meet with the President, and Ben Jealous has joined me in this. When so many schools do it in the right way, it is inexcusable to me why we allow a few renegades to continue to operate the way they do. The vast majority of schools do this very well, but we have a couple bad apples and the fact that we tolerate that is mind boggling. Mr. Obey. Ms. McCollum. Ms. McCollum. Thank you, Mr. Chairman. NATIVE AMERICAN AND ALASKA NATIVE STUDENT EDUCATION Mr. Secretary, I want to thank you for being here today. I do want to thank you for your efforts to make sure that all children, including Native American children and Alaska Native children, have an opportunity to---- Mr. Obey. Is your mike on? Ms. McCollum. I guess I need to go to the school of technology. Thank you, Mr. Chair. But when we talk about Native American children and Alaska Native American children and the work that you have done, we have to be mindful that they are included in two different budgets, the budget of the Bureau of Indian Affairs and the budget that you have before you today that you are discussing with the committee. So, Mr. Chair, I really think in order to talk about doing what is in the best interest of our Native American children and Alaska Native children at some point if we could maybe figure out a way to have both the Bureau of Indian Affairs and the Department of Education in here at the same time, that would be very helpful for us to move forward. COMMON COURSE STANDARDS Last week, 48 States announced their proposal for common course standards and I applaud their efforts, and I strongly support moving forward on the national standards reform. But I am concerned that two States, Alaska and, importantly, Texas, have not participated. TEXAS PROPOSED TEXTBOOK CHANGES I am even more alarmed about decisions made on social studies education by the Texas Board of Education last Friday. Ten out of 15 elected people in one State have effectively manipulated academic materials based on their personal ideology. I have here an article from the Washington Post, and it says, ``Historians criticize proposed textbooks changes as partisan.'' In the article, the Post goes on to say that the Texas Board of Education is imposing a partisan, factually incorrect version of history on Texas students, in effect, students across America because of the way textbooks are purchased. It is outrageous and unacceptable, that a group of 15 people should be allowed to influence the education of all of America's school children. And I don't want this decision in any way to influence textbooks in Minnesota. So I want to be clear. I don't want the Federal Government to write curriculum, but I don't want the Texas Board of Education to be writing curriculum for an entire country either. So, Mr. Secretary, one of my questions to you at the end will be are you concerned and should our Nation's school districts be concerned about this blatant manipulation of history? 48 STATES WORKING TOWARD COMMON STANDARDS Secretary Duncan. Obviously, as you said, the Federal Government does not and should not write curriculum. That is best done on the local level. But I share your hope in the way that 48 States are going together. And this is happening at the local level. If these are Federal standards, our national standard system dies. Because you have 48 governors, 48 school chiefs working together, you have the heads of both national unions working together on this, avidly supporting it, the business community has been crying out for this. This is a game changer. This is a game changer. We are still early. There is, you know, still a lot of hard work to go, but they have done phenomenal work. The leadership is exactly where it should be at the local level, and I think that is where we should focus our energy, and we should continue to move the country in the right direction. Ms. McCollum. Thank you for alleviating some of my concerns. So we have it in front of us, and we know what we are doing. I am going to remain guardedly optimistic. ESEA REAUTHORIZATION Your blueprint for the reauthorization of the Elementary and Secondary Education Act puts, in my opinion, primarily all the responsibility for success with teachers. But, as you pointed out and as was mentioned in an earlier question, it is a shared responsibility. In full disclosure, people should know I have been a classroom teacher. I know that the success of my student depended upon many factors, the ability of myself to teach but many outside classroom factors. Are the students having a bad test because they went to bed hungry the night before, because they don't have proper vision, because their parents have not been involved in making sure that homework was done, because a family is losing their house to foreclosure? All of these factors, including violence in the home, affects a student's ability to perform. Now, sometimes a student's lack of performance will be a teacher, but it is not always. So if you could reiterate for me in a second a little bit more about that. SHEPHERD PROGRAM--POVERTY AND HUMAN CAPABILITY And then we have focused primarily on K-12, but I want to talk to you more at some point about the Shepherd Program that provides a great interdisciplinary study focus on poverty and human capacity through the Shepherd Consortium in colleges and universities that I think will go to the heart of addressing disadvantaged youth and moving America forward. So, with that Mr. Chair, I will remain silent so you can answer. EFFECTIVE TEACHERS AND LEADERS FUNDING Secretary Duncan. I am just thrilled that we have a former teacher on this committee. We need more educators in the rooms, and you have lived this. You have lived the challenges that students face every single day, and I appreciate your commitment so much. Again, a couple fundamental changes we are making from No Child Left Behind is all the accountability was on teachers before and, for the first time, we are saying this is a shared responsibility among schools, districts, and States. That is a fundamental change that I think folks haven't quite appreciated yet. Secondly, we are trying to do everything we can to support teachers. A huge increase in funding to almost $4 billion, $3.86 billion, to create better mentoring programs, more time for collaboration, better pipelines, master teachers, giving teachers the time they need to work together and be successful. And to your point about students, you know, not arriving to school in a vacuum, this idea of student support. A 16 percent increase to create communities whose schools give students a chance to be academically successful--schools with safe climates where students' physical and emotional needs, and psychological needs are being met. There is so much we can do there, and we are trying to make an unprecedented investment to give teachers an opportunity to actually teach and give students a chance to actually concentrate on their academic study and think about their long- term futures. Ms. McCollum. Thank you, Mr. Chairman. Mr. Obey. Mr. Honda. Mr. Honda. Thank you, Mr. Chairman; and welcome, Secretary. EDUCATIONAL OPPORTUNITY EQUITY COMMISSION These past few weeks I have enjoyed our past discussions about establishing equity among our schools. This subcommittee included language in the fiscal year 2010 Consolidated Appropriation Act directing the Department to establish an Educational Opportunity Equity Commission to conduct hearings and community engagement meetings about how the Federal Government could improve education and eliminate disparities. I am glad to hear from my staff that your Department has been to work on this effort, and I look forward to working with you on this moving forward. I notice that your Blueprint for Reform released the other day prominently features the words ``equity'' and ``opportunity'' on the cover and includes equity and opportunity for all students as a key goal. Can you outline for me the approaches you are proposing both in the Blueprint for Reform proposal for the Elementary and Secondary Education Act reauthorization and your fiscal year 2011 budget proposal that will help to meet the educational needs for each student, foster the maximum development potential for each student, and to ensure that each student has the knowledge and skills needed to participate effectively in community life? And in particular can you discuss a few items like what role do your proposals envision for the Federal Government in ensuring that States maintain levels of educational service to provide each student an equitable and sound basic education during times of declining State and local revenues? How you propose to assess the needs of each student, the effectiveness of schools in meeting the standards of an equitable and sound education for each student? How does the Administration propose to address and rectify the deep, abiding inequality that exists in public education in this country? And you will notice that instead of saying ``all'' students, I really emphasize ``each'' student, because I think that terminology will drive policy and the expression of policy. What are your thoughts on these questions? ENSURING EDUCATIONAL EQUITY Secretary Duncan. First of all, Congressman, I just want to thank you for your leadership on this issue. This is one that I think is hugely important for the country. What I have said repeatedly is if we are serious about trying to close the achievement gap, we have to close what I call the opportunity gap. And I am convinced that children from, again, poor neighborhoods, poor communities, tough families, if they have the opportunities they can do very, very well. As you know, I have brought in Russlynn Ali to lead the Office for Civil Rights. She is an absolute superstar. She has an absolute passion for this. We want to reinvigorate that office. We want to step up our enforcement of civil rights on behalf of students, and we will be working hard to make sure the rights of all students are protected. We are going to specifically focus on schools with large achievement gaps and ask them to implement data-driven decisions to close that gap, and we are going to hold districts accountable for closing the gap within districts. TEACHER AND PRINCIPAL EQUITY We want to have a reinvigorated focus on teacher and principal equity. We have to do a much better job of supporting States and districts to ensure that the highest need schools have effective teachers and principals, and we are going to ask districts to show that the resources that they provide to high poverty schools are truly comparable to those they provide to low poverty schools. And, finally, we have in our proposed budget approximately $900 million in school improvement grants to make sure those students who have been historically underserved have an opportunity to get a dramatically better education, and we do this with a sense of urgency. So, a lot of hard work ahead of us. I look forward to the collaboration with you, and I think we have a chance to do some very important work as we move forward. SCHOOLS AS A REFLECTION OF COMMUNITY Mr. Honda. The civil rights of youngsters--as you have said before, education is a civil right, and I agree with you. This country has attempted to correct that in terms of our efforts in desegregation. We are seeing resegregation in different ways now. Looking at the bigger picture of how schools are created, I think what we have learned from the desegregation effort is that a school reflects the community that it is in. Will there be a role in this effort where we will work with local entities in the zoning efforts? Because the zoning determines the community, and the community is from which the students are coming from. Looking at redevelopment projects where entire neighborhoods are gone and new ones are brought up without any consideration to its impact on schools, if we have environmental impact reports, should not the social impact of a neighborhood on children also be part of the consideration? If you have any thoughts on that. Secretary Duncan. Again, schools don't exist as islands; and how we create communities to support those schools, how we fund schools equitably, all those things help to give students a chance to be successful. I think we can be much more creative and much more thoughtful on how we do that. And it troubles me that far too often the children who need the most help, the most resources, the best teachers, the best principals, the best facilities don't receive them. Mr. Honda. So it seems to me that we have to be looking at our cities and counties and our States in how they develop land use rules and regulations and know that schools are part of the infrastructure of a new community. Thank you, Mr. Chairman. PROMISE NEIGHBORHOODS Secretary Duncan. Critically, one of the big investments we want to make is in this Promise Neighborhoods initiative, again to create communities around schools to give those schools a chance to really help students learn. Mr. Obey. Ms. Roybal-Allard. SHIFT TOWARD COMPETITIVE PROGRAMS AND CONSOLIDATIONS Ms. Roybal-Allard. Welcome, Secretary Duncan. First, let me associate myself with Chairman Obey's comments about funding new and untested competitive grant programs while districts struggle to provide children the education they need and deserve in the wake of devastating budget cuts. The Los Angeles Unified School District is a perfect example. With a $620 million deficit, it has been forced to issue 5,200 pink slips and shorten the school year by 5 days. LAUSD and districts like that desperately need funding from reliable tested programs like Title I to retain teachers and to keep classrooms open, and I want to thank the chairman for raising the issue, and I hope you will be giving it very serious consideration. EDUCATIONAL TECHNOLOGY STATE GRANT PROGRAMS Mr. Secretary, the Administration has proposed the consolidation of many education programs that provide badly needed services. I find this to be very troubling because, from my experience, consolidation can and often results in the elimination of a program regardless of how great the need. EDUCATIONAL TECHNOLOGY STATE GRANT PROGRAMS I am particularly concerned about consolidating the educational technology State grant programs which complements our $30 billion investment in broadband Internet access and other technology for our Nation's classrooms. These grants have been essential to our State and local school districts' efforts to coordinate the purchase of technology and the training of educators on how to use it. For example, the State grant funding received by the Los Angeles Unified School District is used to hire technology coaches who train teachers at its 680 campuses on the use of technology. Without a dedicated funding for this purpose, how will the district coordinate their technology programs and ensure that educators can effectively use the technology made available to them? Secretary Duncan. I appreciate your concerns. Obviously, we think technology is a hugely valuable tool going forward to accelerate learning and to help students who haven't had those opportunities before; and we will work with Congress on reauthorization of technology activities. There has been no decision yet on whether nationally it will be formally competitive, so we look forward to working with you on these issues. Ms. Roybal-Allard. So this is not going to become a competitive---- Secretary Duncan. No decision yet has been made. But we look forward to working with you on this issue. Ms. Roybal-Allard. That is great to hear. Secretary Duncan. And note, just big picture, we think that technology is a huge piece of the answer going forward; and we want to find ways to integrate it into everything we do. Ms. Roybal-Allard. Right. Because it makes no sense that we have spent already $30 billion if teachers don't know how to use that technology. INCOME-BASED REPAYMENT OF STUDENT LOANS When the Higher Education Opportunity Act was signed into law in August of 2008, a loan forgiveness program was authorized for service in areas of national need, including health care professions. In light of the critical and the growing demand for nurses, I find it surprising that this program has yet to be funded. Why did the Department not include the loan forgiveness for service in areas of the national need program in your budget proposal? Secretary Duncan. That is actually part of the higher education bill that is before Congress and before the Senate. So the IBR, Income-Based Repayment, we are a huge fan of. It significantly reduces loan repayments on the back end and brings folks into the public sector, great talent, and we will forgive that debt after 10 years. So that is something that we think is very, very important; and we continue to advocate for right now, we have already reduced it to 15 percent of income in terms of loan repayments; and we want to take that down to be 10 percent and after 10 years of public service have all those loans forgiven. So whether it is nurses, whether it is folks working in medical clinics, or legal clinics, or teachers, folks going into the public sector, we want to create much better avenues so they are not handicapped by staggering debt that prohibits them from following their heart and helping out in the community. TRIO, GEAR-UP, HEP AND CAMP PROGRAM REQUESTS Ms. Roybal-Allard. In the few seconds that I have left, I also want to express my concern about the flat-funding for the TRIO, GEAR UP, and the High School Equivalency and College Assistance Migrant Programs, especially when the President has this goal of, by 2020, having the United States to be first in the world in the percentage of citizens with college degrees. These are, again, proven college preparation and support programs that have successfully helped low-income students achieve; and particularly when we are having experts telling us that the education of poor and minority children is absolutely key to our Nation's future economic success, I just find it incredibly surprising that the Department again is only level- funding these programs which could truly help us to reach the President's goal of 2020. COLLEGE ACCESS AND COMPLETION FUND Secretary Duncan. I appreciate that; and, again, I am a big fan of those programs. They have done a great job, and we have proposed a College Access and Completion Fund that would enable those and other programs to actually significantly increase their funding based upon their ability to demonstrate exactly your point, that they are making a difference in student's lives. Mr. Obey. Mr. Ryan. Mr. Ryan. Thank you, Mr. Chairman. Thank you, Mr. Secretary. You are doing a great job. I really appreciate everything you are doing and using your bully pulpit to reach out to different areas like the NCAA issue. I really appreciate that. SOCIAL AND EMOTIONAL LEARNING PROGRAMS Last year, in our report language we put some--this committee put some language in regarding social and emotional learning, and I have talked to you about this a few times. The committee believes that addressing the social and emotional development of students through evidence-based social and emotional learning programs is a highly effective way to promote safe and drug-free schools and to promote higher student achievement and attainment. The committee urges Federal support for the implementation of evidence-based social and emotional learning standards and programming. Can you just kind of comment on what you guys have done recently? Secretary Duncan. And what we will continue to do. In this budget, we are proposing $1.8 billion for a range of student supports, including social and emotional learning. That would be a $245 million increase, a 16 percent increase. So we are trying to put our money where our mouth is and say that we have to create climates again where students have a chance to be academically successful. And if we are not addressing those social and emotional needs, quite frankly, we are kidding ourselves. Mr. Ryan. I agree. SOCIAL, EMOTIONAL DEVELOPMENT AND DECISION MAKING ABILITY I want to bring to your attention--Representative Kildee and I are sponsoring the Academic Social and Emotional Learning Act to provide technical assistance to schools to try to implement these social and emotional learning programs and hope we could get your support and hopefully get that passed and get some money into that as well. One of the recent studies I wanted to share with you, a casel meta-analysis of more than 700 positive youth development, SEL character education, and prevention interventions has shown that SEL programs improved students' achievement test scores from 11 to 17 percentile points. And, as we see, the brain science, you know, more and more backs up that we have got to teach these kids how to regulate their emotions. We now know that the part of their brain that has to handle the emotional situations that these kids are dealing with also deals with their short-term memory, their decision- making ability. So all of these issues that we have talked about these kids making bad decisions, whether it is teen pregnancy, whether it is alcohol abuse, regardless, I think teaching these kids these skills is unbelievably effective. I have been to schools in Cleveland. We are starting a pilot program in three of the schools in my district. So I would just encourage you to stay focused on SEL. We are throwing a lot of money around, and I think this--which in many instances is needed--but I think this is a very, very effective, cost-effective way of doing business. Secretary Duncan. I appreciate your leadership so much, and you hit the nail on the head that these are learned skills. So children can have huge challenges, but if you help them learn how to handle those and deal with them, then you have a chance. When you don't, they can't get past those challenges and can't begin to think about what is going on in class. But these are absolutely teachable, learned skills; and the more we can do that--and I think children today have probably never had more challenges--huge pressures, huge temptations, stresses at home--and if we are not addressing this, we are not in the game. So thanks so much for your leadership---- TEACHING STUDENTS TO UNDERSTAND EMOTIONS Mr. Ryan. You have got it. There are a lot of good programs out there that really break it down in the curriculum, where they are teaching about the brain, they are teaching about the amygdala and the prefrontal cortex to first and second graders so that they understand what is happening to them when they get pushed on the playground or when they have a domestic issue at home. They know what is going on. And I think that level of awareness that the student has about what is happening to them is critically important for them to be able to then figure out how to not respond in a bad way. EARLY COLLEGE ENROLLMENT AND DUAL ENROLLMENT PROGRAMS One other question. We have a great early college enrollment program in Youngstown, Youngstown city schools. We also have one in Akron as well in my district. One of the issues I wanted to bring up, because of budget constraints, Youngstown State University, they have cancelled the program. So what I wanted to ask you about is making Pell grants eligible for kids who are going into early college. I don't think it is going to cost us any more money. I think in the end it will actually save us money, because we are front-loading the money. So paying for these kids to go to college with Pell grants their last 2 years of high school and so we are going to avoid the latter years of the cost of living or the increase in education costs had they waited 2 more years. So can you help us with that and comment on it, about creating that pipeline? Secretary Duncan. Our Administration is hugely supportive of early college and dual enrollment. What is interesting to me is so often historically this is seen as a thing for the advanced juniors and seniors to do. What I often see in different contexts, it is actually a dropout prevention program. For students who may not be the highest performing but are in the middle of the pack, when they start to take a college class and get college credit and start to think, man, I can really function and be successful in this environment, it changes their whole perspective on life. So it is a very interesting range of students who can benefit from this. COLLEGE PATHWAYS We have proposed in our budget $100 million for College Pathways, an accelerated learning program that would expand access to college, dual-enrollment, AP classes, the international baccalaureate program as well. So $100 million there. PELL GRANTS AND EARLY COLLEGE PROGRAMS On the Pell grant issue specifically we have talked about, it is an intriguing idea. I think it has been considered in the past, and there are some challenges associated with expanding Pell grant eligibility to students during high school, but it is an idea worth kicking around, and I would be happy to look into this and other options. At the end of the day, your goal of significantly expanding access to early college programs, I don't think we can do enough of this, and we have to be very creative in how we think about this. Mr. Ryan. I mean, we are going to spend this money on the Pell grant one way or the other--I mean, if they go to college, you know--and let's spend it early and make sure they get into college, like you said, even the people in the middle of the pack. Thank you, Mr. Chairman. Mr. Obey. Thank you. Ms. DeLauro. Ms. DeLauro. Thank you very much, Mr. Chairman. DISPROPORTIONALITY IN SPECIAL EDUCATION Good morning, Mr. Secretary. It is great to see you. Just very quickly a point, I am going to send a letter to you about an important issue in my district regarding significant disproportionality in IDEA. I don't want to take your time this morning. Secretary Duncan. Give it to me when we are done. Ms. DeLauro. I will get it to you, and hopefully we can take a look at this. Secretary Duncan. I will have Alexa Posny take a very close look at it for you. Ms. DeLauro. Great. Thank you. EARLY LEARNING CHALLENGE FUND Mr. Secretary, I have been a long-time and a strong supporter of early childhood education and the resources for critical programs like Head Start, Childcare Development Grant, others. I was excited to see the Administration's focus on early childhood through the initiative in the Early Learning Challenge Fund. I was proud to vote for this in the education bill that now will be part of reconciliation. But, let me ask you, if we are not successful in including the Challenge Fund in reconciliation, what is the administration's backup plan to make this important initiative a reality? Secretary Duncan. It is hugely important. And, Congresswoman, I would agree with you that probably the best investment we could make, the best return is in early childhood education. And what we all talk about is we are constantly playing catch-up. I keep saying we have to get out of the catch-up business, and the best way to get out of the catch-up business is to make sure that our 5-year-olds hit kindergarten ready to learn and ready to read. We have far too many children who--it is not just 3- and 4- year-olds, but what are we doing zero to 5 to make sure that we are leveling the playing field? I am convinced that if we did that well, so many of these challenges we face long-term, dropout rates and other things, would be dramatically lower. So, you know, we desperately want that Early Learning Challenge Fund to be in there. If it is not, we need to work through a different vehicle or do something. But this President, this Administration, is absolutely committed here. You know, we are asking for almost $10 billion over the next 10 years. We have had some questions about collaboration. We have had a wonderful, wonderful partnership with HHS and Secretary Sebelius; and we all are working together. This is a huge opportunity for the country to break through, and we hope it goes through. If it doesn't, we need to work together---- Ms. DeLauro. I, for one, will push to be a part of that effort. I think if it is not, we must really work together and collaborate to make sure that that happens. EVEN START Let me ask a question about Even Start. That is something that I have talked about before. Last year's House report reflects the priorities of this subcommittee and the members and, I might add, certainly of the chairman. And just very briefly, the committee strongly recommends $66 million for Even Start, which is the same amount as the fiscal year 2009 funding level. It provides grants to States, family literacy, integrating early childhood education, adult education, parenting education for low-income families and their children from birth to 7 years old. The committee goes on and says it does not agree with the Administration's program to eliminate Even Start, and the view on that was that--the elimination, which our view is that it was based on results of flawed evaluation studies, studies that were not representative of Even Start participants and programs based on small samples, et cetera. I have to ask you this: Why have you come back again with a proposal to eliminate this program? This is a program that serves 50,000 families nationwide. It is the only Federal education program that focuses specifically on parents and their children and the literacy learning skills that they can work on together. So I am having trouble understanding why you--why the Administration insists on ending this program. Secretary Duncan. We talked about it earlier, and I am a huge fan and supporter of family literacy. Growing up, as part of my mother's after-school program, she spent a lot of time not just working with children but working with parents and trying to make sure that she was changing what was going on inside the household and really making sure parents had the skills to function and to support their own children. So this is one that we are passionate about. Family literacy is something that is part of the literacy program in the proposed ESEA authority on a well-rounded education. We actually propose a 10 percent increase in funding. Even Start projects can absolutely apply--compete to do that. Brenda Dann- Messier, who is leading our adult ed work, is a passionate advocate and did phenomenal work in adult literacy. So this is something we are going to work very, very hard on, going forward. So it is part of an overall literacy package. We don't have a line just for Even Start. Ms. DeLauro. Well, you know, I can't be a predictor of where this committee will come out, but I can say for myself that I would be one and I suspect that there are others that are going to want to see that this program continues. Secretary Duncan. We are happy to have that conversation. Ms. DeLauro. Thank you very much, Mr. Secretary. Thank you, Mr. Chairman. Mr. Obey. Thank you. EDUCATION JOBS SAVED BY RECOVERY ACT Mr. Secretary, you indicated and witnesses did yesterday that about 325,000 teachers' jobs were saved by the Recovery Act. We roughly filled about 40 percent of the hole in State budgets last year. This year that is going to drop about 20 percent. This program is meant to be temporary. Some people object to it; and they say, well, this is going to wind down. What good did you do? EDUCATION JOBS BILL And the whole point of the program was to simply get us through the next 2, 2\1/2\ years until the private sector could recover and pick up the slack again. To do that, last December the House passed a second jobs bill, which contained $23 billion in additional assistance to education because we don't want to see 50 percent of the teachers whose jobs were saved last year lose those jobs in the coming year. So let me ask what will happen at the local school district level to their ability to retain those teachers if we do not pass that bill or something similar to it that provides at least a similar amount of assistance to States and local school districts. Secretary Duncan. Chairman, I appreciate your huge leadership on this. I share your concern. I am very, very concerned. As I travel around the country, everywhere I go, everywhere, no one is immune from this. Folks are hurting. And we are not just cutting through fat. We are beneath bone now. And to hear about skyrocketing class sizes, to hear about--I keep arguing for more time, Mr. Chairman. We see students going to 4-day work weeks. Those are huge challenges, and we need to do something. We need to do something. Mr. Obey. What will happen if we do nothing? Secretary Duncan. You will see some devastating cuts around this country. And folks that are making these cuts, fiscally responsible superintendents, school boards for the fall are planning budgets now, March and April. So this is not something that is going to play out in August. These things are happening in real time. Mr. Obey. And won't it also put additional upward pressure on local property taxes? Secretary Duncan. Sure. Sure. Absolutely. TITLE I, ESEA FUNDS FOR HIGH-POVERTY SCHOOLS Mr. Obey. I referred to this chart earlier, and what it shows is that, among students who scored in the top quarter--I said 20 percent earlier. I should have said top quarter--on eighth grade math tests, the child of a wealthy family graduated from college 74 percent of the time, while a child that came from a poor family graduated only 29 percent of the time, even though they demonstrated the same ability. I would point out a similar relationship exists between that eighth grade performance and the decision to even enter college. What is the one program for elementary and secondary education which we have relied upon for years to try to equalize that poverty situation? Secretary Duncan. Title I. Mr. Obey. Right. How do we correct that if we don't provide significant increases in Title I? SCHOOL IMPROVEMENT GRANTS Secretary Duncan. A couple ways. One is, as you know, the school improvement grants are going to be directed to those low-performing, high-poverty schools. So we are trying to make a very, very significant investment there. We have $3.5 billion that we want to put out to those schools now. We have to focus--and there aren't simple answers here. You have to focus on getting great talent into those historically underperforming schools, and we want to work hard on that as well. And I would argue that Pell grants, making sure students have access to resources to go--we have so many families--you probably saw the same survey I saw a couple weeks ago. A lot of American families just don't think college is for them. TITLE I FUNDING Mr. Obey. I understand about Pell grants, and I will get to that. But the fact is that if you want to provide assistance to all poor kids around the country, you don't need to go through a targeted program that gets to a few school districts. Because there are many, many poverty districts around the country who will never get the grants that you are talking about. ADDRESSING INEQUALITY IN EDUCATION Which leads me to the same question that I was asking before and several others have been asking. Why if we want to close that gap would we not concentrate on Title I? I mean, I was elected in 1969. That was at a time when the Federal Government had just started programs like Title I, and I sponsored Wisconsin's first State version of Title I. I still remember the bill number, 51-A. That was a tiny little initiative at that time, $5 million for the entire State. That went a lot further in those days than it does now. But I mean I have been trying and so have most people on this panel been trying ever since to meet the needs of Title I by providing for more full funding. We have never come anywhere near close to where we should be in funding Title I. So, I don't understand why I should be all that interested in focusing what meager additional resources there are in the education budget this year on a new program when we know that the basic program is there to deal with poverty stricken kids all over the country. Secretary Duncan. I think obviously what you and I absolutely share in common is a passionate desire to help disadvantaged children be successful, and Title I is a huge piece of that. But I would argue that everything we are trying to do is trying to address those inequalities. So trying to put money to attract great teachers into poor communities we think is hugely important. Trying to make sure that students have a well- rounded education, where so often it is narrowed, is very, very important. Chairman Obey. I think that is important, too, but, to me, there are lots of ways we can provide incentives to put better teachers in some of those schools. But I question such a heavy focus on teachers. Yes, I want quality teachers, but let me give you an example: Me. When I was in 7th grade, I skipped school 2 days a week, and that is how I learned to play the harmonica. I was hiding out in the woods. Secretary Duncan. We need more music in school. Chairman Obey. But I finally got turned around essentially by two teachers. Now, if I hadn't gotten turned around, should those teachers have been blamed for my failure? Secretary Duncan. No. No, of course not. Nobody is suggesting that. No, of course not. Of course not. But great teachers turn around children, you and many others included. We all remember those teachers that changed our lives. And all we want to do is we want to shine a spotlight on excellence. What I will tell you is there have been very few incentives for those great teachers to go to historically underserved communities, very few rewards to do that, and we want to make sure the children who need the most help are getting it. Mr. Obey. I understand, and you are focusing on heavily underserved communities. RACE TO THE TOP APPLICATION PROCESS But let me make a point. In your Race to the Top package, I am told by my State education people and by my Governor that when your Department considered their application, that all of the points that they would have earned in your evaluation system were roughly related only to six counties in the State-- Milwaukee, Kenosha, Racine, Madison, Green Bay, and I have forgotten the other one. Secretary Duncan. I don't know the specifics of your proposal, but I will say what we were trying to reward is States that had comprehensive plans--urban, rural, suburban, every child. Mr. Obey. All I can tell you is that my State people think that the focus of your attention was almost exclusively on those six urban counties. FOCUSING INCREASED RESOURCES ON INEQUALITY The point I would make is simply that we have got 72 counties in the State, and there are a lot of them outside of that area that are low income and have lots of poverty kids. I just do not understand why we do not--very frankly, I am a Democrat, as you know, and so are you. I do not understand why, when we finally have a shot at it, we are not greatly emphasizing Title I before we do others. I am all interested in reform, but, as Richard Nixon said, timing is everything in politics. And as I see it, I will be a whole lot more interested in putting additional money in reform efforts 2 years from now when the economy is through this recession than I am right now when everybody is sucking for air. I don't understand why we do not have a greater emphasis on trying to help those school districts. Secretary Duncan. Obviously, I think we would agree we need to do both. We need to help stabilize schools under huge stress, and we need to get dramatically better, and we are trying to find that balance. HISTORY AND CIVICS EDUCATION Mr. Obey. Let me ask an additional question. I asked this yesterday of the panel, too. We seem to be fixated on improving performance for math and science, but I, frankly, am concerned that we are going to be producing a generation of societal and political illiterates. Because I think you see as the testing focuses on math and science, for instance, or math and reading, it isn't just the arts that get squeezed aside, it is history, it is civics. As I said yesterday, I was in one class a few months ago where the kids couldn't tell the difference between a State legislator and a third baseman for the Chicago Cubs. They were absolutely illiterate in terms of the things they would need to know to function as citizens in a democracy. How do you feel about this emphasis on math and science and how do we produce a much more well-rounded approach to education? Because, otherwise, we can set utilitarian goals, but it is not going to meet our other societal needs. BUDGET INCREASE TO PROMOTE WELL-ROUNDED EDUCATION Secretary Duncan. I will tell you, I was in 37 States last year--rural, urban, suburban. Everyone--teachers, parents, students--all expressed their huge concern about what we are seeing in this country, which is a narrowing of the curriculum. I couldn't agree with you more. So yes, reading and math are important, but, again, one of our six big buckets is a well-rounded education for history, for arts, for financial literacy, which we haven't talked about, which is a big one, for foreign languages---- Mr. Obey. Financial literacy, we could start with Wall Street bankers. Secretary Duncan. And we ought to produce a next generation of students who do better than what we have seen today. I mean that very seriously. For all those things, civics education, history, social studies, we propose a 17 percent increase, $265 million. So the need for a well-rounded education--let me just say one more thing about it, Mr. Chairman. It is hugely important. It is not just important at the high school level, which is often what people think. I think that for first graders, second graders, and third graders, we have to give students a chance to find their passion--music for you, art for someone else, drama for someone else. We have to provide those opportunities; and if we don't do that, we really put a ceiling, a limit on what students can accomplish. So math, reading, science, are very important. So is foreign language, literature, arts, PE. We need to get back to those things, and we are trying to do everything we can to encourage that. A well-rounded education is critically, critically important. Mr. Obey. Mr. Tiahrt, why don't we give everybody a shot at one last question or so before we shut down the hearing. Take a couple minutes yourself, if you want. CIVIL RIGHTS Mr. Tiahrt. Thank you, Mr. Chairman. I have been hearing several times that education is a civil right. So I don't recall it being in the 14th amendment or the Civil Rights Act of 1964. I checked the White House Web site. It is not included there under civil rights. It is not in Wikipedia. I don't think it is a civil right. I think it is very important, but I don't think it has the status of a civil right, and I think it diminishes those who are protected by our laws for civil rights by trying to broaden it. PROPOSAL FOR DIRECT LENDING FOR STUDENT LOANS I have a question more directly about student loans and the government taking over the process of administering student loans. As I see it, we have these two avenues: One is where the government takes over student loans and takes money that we don't have, so we have to go borrow money to loan to students. So the students end up going through school and then have to pay back not only the student loans but then the money that the Federal Government borrowed to provide the student loan. When you compare that to banks, banks already have money to lend. We don't have to go borrow from the Chinese. So the student just has to get his education and pay back the student loan. One can make the argument that the Federal Government is subsidizing the money and will have to borrow money to subsidize the interest. And I would say it is much cheaper to borrow just for the interest, rather than for the loan and interest, and I think you would agree that math is correct. So why are we doing this? Is it for control? Is it to limit what institutions can receive money or limit some curriculums? What is the purpose for borrowing money for student loans when we don't have it? PROPOSAL TO INCREASE PELL GRANT FUNDING Secretary Duncan. It is very, very simple. Taxpayers are already spending this money. Taxpayers are subsidizing banks today. This is not a new expense. Mr. Tiahrt. This program will continue, but we are not going to continue to subsidize banks. Secretary Duncan. Let me just finish. So we think we should stop subsidizing those banks; and we think we should invest scarce resources, taxpayer resources, yours and mine, into students. To be clear, what we want to dramatically increase is access to Pell grants. That chart that Chairman Obey put up there haunts me, and the lack of financial resources for poor families to go to college is a huge impediment and a huge killer of dreams. Mr. Tiahrt. Since my time is limited---- Secretary Duncan. Let me finish. These are Pell grants. Students don't have to pay these back. These are grants. Mr. Tiahrt. I am talking about student loans, the student loan program that the government is trying to take over. Secretary Duncan. This is Pell grants that we are trying to increase. STUDENT LOAN REFORM Mr. Tiahrt. I am talking about student loans. The government is trying to take over student loans, correct? Secretary Duncan. We are trying to stop subsidizing. We are trying, rather than have the private sector initiate those, we would initiate those. Mr. Tiahrt. The bank I received my student loan from is still in business today, and it did not receive any subsidized funds, even in the latest go-around. Secretary Duncan. I would beg to differ on that one, and I am happy to look at that specific situation. But we can dramatically increase Pell grants to students, we can invest in community colleges, we can lower loan repayments at the back end, the income-based repayment, simply by stopping subsidizing banks. Mr. Tiahrt. Well, there are students that will get access to college through student loans, do you agree? Secretary Duncan. Sure. Mr. Tiahrt. Okay. So why is the government taking over student loans? Why don't we continue to pursue that through the private lending institutions, like I did when I got my college student loans? Secretary Duncan. Because we can save tens of billions of dollars by initiating the loans ourselves. The servicing of the loans will all be done by the private sector. Mr. Tiahrt. How can we save money when we have to borrow money for the student loans and for the interest? Secretary Duncan. We are going around in circles here. We can save money because of subsidizing banks, and the---- Mr. Tiahrt. The bank that I got my student loan from is not subsidized. Which bank is subsidized that is providing student loans today? Secretary Duncan. This is across the country. The servicing of these loans would all be done by the private sector. It is not our sweet spot. We would do none of that. Good actors would get a lot more business. We have more and more people going back to college in this country, which is a good thing. Bad actors would lose business. The free market would play. Mr. Tiahrt. I think it is out of line for us to get into the student loan business, because we don't have the money to start with. And it doesn't save us money. It costs us money to do this. Private banks have the money available. So I think it goes beyond just the financial side. I think there is some control issue here, and I want to know what it is. Secretary Duncan. There is zero control issue. Mr. Tiahrt. What requirements would we put on student loans? Mr. Kennedy advocates cutting them out for Ivy colleges, and I think he makes a good argument for that. Secretary Duncan. Let me finish. The private market, before we have done anything, as you know, has been collapsing. This thing has been on life support. And before we got here, we have seen a huge migration of universities to direct lending, from about 1,000 universities to 2,300 before we got to town. So this is something that has happened without us doing anything because the private market wasn't working. Mr. Tiahrt. I would say if private institutions want to pursue that path, they should be open to doing it. I just think there is something beyond this, and it is in the element of control, and I think it is a bad path. The other thing I want to mention before my time runs out-- -- Secretary Duncan. I just want--for the record, I want to say we have zero interest in that. We simply want to stop subsidizing banks and put scarce resources behind students. INDIVIDUALS WITH DISABILITIES--GRANTS TO STATES Mr. Tiahrt. I want to join with Congresswoman DeLauro about my concerns on IDEA as well. I want that for the record, that we need to get to our proportionate share, and it needs to be equitable. Secretary Duncan. We have a $250 million increase for IDEA grants to States. I hear that concern. Mr. Obey. Ms. DeLauro. TEACHER RECRUITMENT AND RETENTION Ms. DeLauro. Let me just echo something that the chairman said, and I guess many of my colleagues, because I arrived late, and that is it was Randi Weingarten who said a child's education should not be based upon how well adults write grant applications. I couldn't agree more. When States start to lay off teachers--I just want to make this statement because it has been discussed here--they undermine our economy further, not to mention increasing class sizes. I know you believe that we have to have reform in a good and a bad economy, but I think what is key to all of us at the moment or at our core here is the timing and making this shift in education funding and the effect that it is going to have in terms of worsening the economy; and instead of providing that opportunity, a better education opportunity, we will be curtailing that. So I just want to add my voice to that. But let me ask about the Teacher Incentive Fund, if I can. Teachers, you know, we have said are the most critical factors in improving student achievement. We are doing everything that we can to make sure we can recruit and retain the best teachers. But we know from the research that the financial incentives are of limited value to attracting teachers to low- performing schools. A survey by Scholastic, Inc., and the Bill and Melinda Gates Foundation show that non-monetary rewards are the most important things in obtaining good teachers. I believe only 8 percent responded that pay-for-performance plans are key. What initiatives do you propose in your budget to attract the best and the brightest to serve the neediest kids, especially once the schools are labeled as the State's worst schools? TEACHER INCENTIVE FUND In a related question, how can we justify an increase of $800 million in the Teacher Incentive Fund, a program that 2 years ago was only $97 million and also a program that received $200 million in the Recovery Act and I believe that the funding has not gone out yet? Secretary Duncan. Many, many factors go into attracting great talent to underserved communities. I absolutely agree. Increased financial rewards is a small piece of that. A couple of things have to happen. You have to have a great principal. Teachers will follow a great principal to the end of the Earth. Great principals make a huge difference. Bad principals run off good teachers. That is part of the problem. Principal leadership is hugely important, and we have to invest there, and we are looking for a five-fold increase there. PROMISE NEIGHBORHOODS You need a community to rally behind a school. So all the work we are trying to do around Promise Neighborhoods tries to create that community of support behind those troubled schools. Ms. DeLauro. That is the Comer Model, and I am very familiar with the Comer Model in schools, Jim Comer. Secretary Duncan. And when you put it in place, great teachers want to go to those tough communities. They want to have a chance to succeed. And if we can put in place the structure, more time for them, more time to collaborate, better resources, better data, we put those in place, I promise you great teachers will want to go to underserved communities. Mr. Obey. Mr. Cole. Mr. Cole. Thank you, Mr. Chairman. MOVE TOWARD MORE CONSOLIDATION AND COMPETITIVE PROGRAMS Just an observation and a couple questions. I think what you are running into, Mr. Secretary, is there is a lot of confidence in you, quite frankly, but I don't know who the next Secretary is going to be. And I worry about just the centralization of power and the grant approach that brings, the pickers of winners and losers, who is going to do it, how it is going to work, and how you are going to have any certainty at the receiving end of this process. I think you do need certainty over a period of time if you are going to make the kind of investments that are necessary. ASSESSMENT OF NO CHILD LEFT BEHIND But let me ask a historical question, because I am struggling with trying to understand what we have done right and where we need to change, get better, and what you want to do. Under No Child Left Behind, which is now, of course, much maligned but actually had a couple of great virtues, one of which was actually bipartisan, which I think to move ahead here you need to be bipartisan; and, second, that it really did put a lot of focus on the consumer here, i.e., the kids, as opposed to anyplace else in the bureaucracy and how are we doing with them and are we really particularly looking, by breaking students out, at kids that are the most disadvantaged, the most challenged, and trying to target resources there. I am happy we are going through reauthorization, because that is why we have it. So what have we learned? What do we need to do different? Looking first at No Child Left Behind, could you tell me, did scores for kids broadly--and I mean very broadly--go up? Did we narrow differences, which is what we all wanted to do on both sides of the aisle? Secondly, going forward, could you just explain for me the differences in where you propose to go? And I actually look on this as building on. I don't see this as antithetical efforts necessarily. But where are the differences, the course corrections you are making, in contrast to where we would have been had we just simply stayed on line, which never is a very good idea? Secretary Duncan. I appreciate that, and I want to assure you that we will only do this and want to do this in a bipartisan way. I consider that education has to be the one thing that rises above politics and ideology. We all have common interests. I have been so impressed here. The leadership of the House, the Senate, Republicans, Democrats, everybody is working hard on this together. DROPOUT RATE AND COLLEGE COMPLETION My sense of urgency is--I go back--we have a 27 percent dropout rate. That hasn't moved. We used to lead the world in the percentage of college graduates 2\1/2\ decades ago. We have flat-lined. Everybody else has passed us by. You want to know why we are in a tough economic position now? I think that explains a lot of it. So we need to get dramatically better, and we need to get better as fast as we can. FOCUS ON ACHIEVEMENT GAPS What I will always give the previous Administration credit for was focusing on achievement gaps. We used to like to sweep that under a rug as a country, and it forced us to have those tough conversations. We need to continue to have them and the idea of disaggregating data, really looking at what is going on there. That is something we will never, never walk away from. And we have to have focus on achievement gaps. ASSESSMENT OF NO CHILD LEFT BEHIND Having said that, I wasn't here. I don't know the history. There were a number of consequences intended, unintended I don't know about, challenges that I have heard repeatedly around the country as I have traveled. The law was far too punitive. The law was very prescriptive. And this is well- documented. It actually lowered the bar. Due to political pressure, States lowered standards, which is absolutely the wrong thing to do, wrong thing educationally, wrong thing economically. But due to political pressure, the standards got lowered in many cases; and, to Chairman Obey's point, we saw a narrowing of the curriculum. FOCUS ON GROWTH, GAIN; REWARD SUCCESS, EXCELLENCE So what do we need to fix? We need to raise the bar, have meaningful standards, a high bar for every child. We need to reward excellence and success. Again, I want to look at growth and gain, how much are students improving each year. Let me give you one example I use. Let's say you are a sixth-grade teacher, and I come to you, and I am three grade levels behind. I am reading at a third-grade level. I leave your class, I am one grade level behind. Under No Child Left Behind, you are a failure. You are a failure. Your school is a failure. Your State is a failure. I think not only are you not a failure, you are not just a good teacher, you are a great teacher. I had 2 years' growth for a year's instruction, and we should be recognizing that excellence. We should be learning from it. We should be encouraging it. We should get more of those teachers into underserved communities. So that is a huge problem we have to fix. I think by focusing on growth and gain, that is the right way to do it. So reward excellence and success, more local flexibility, essentially how you want to manage. FLEXIBILITY AND ACCOUNTABILITY No Child Left Behind was very loose on goals: 50 different goalposts, 50 different standards, many got dummied down, very prescriptive, very tight on how you get there. We want to flip it on its head: tight on its goals, high bar for the country, college- and career-ready standards. But give much more local flexibility, hold folks accountable for the results, let them move to get there. And then, finally, and we are trying to invest heavily here, our students need a well-rounded education. Mr. Cole. Thank you, Mr. Chairman. Mr. Obey. Ms. McCollum. Ms. McCollum. Mr. Secretary, you talked about holding, and so I want to give you an example of why I think you need to do that. The State of Minnesota, for balancing its budget a couple decades ago, decided it would delay payments to school districts, not make them on time. School districts had to go out on the market and borrow money and pay interest. That money wasn't going to children. That was one of the last actions I took. We corrected that before I ran for Congress. And now Governor Pawlenty is right back. That was the demand that he had in balancing the budget, that the school districts have to go borrow money in order to make their day-to-day payroll obligations so the State of Minnesota didn't have to. That is wrong, and I hope you hold States accountable. PROPOSAL TO MOVE TO STUDENT LOANS DIRECT LENDING I would like to give you an opportunity to walk through what we are doing with the Direct Student Loan program. It used to be, if I understand, the U.S. had the money, we gave it to the banks that then distributed it to the schools, and everybody took their cut on it, and we took the full risk. But now we are lending directly to the schools where the financial counselors and the students are sitting together. Would you walk through that for me? Secretary Duncan. You summarized it perfectly. We have subsidized banks where we have all the risk, and if we can just cut out the middleman there and do direct loans across the country--again, we are seeing a huge migration towards this anyway before we did anything because the private market was drying up. We saved tens of billions of dollars. I understand banks' resistance to this. They have had a very good deal; and because of those subsidies--and this is all a matter of public record--they have been able to hire and spend millions of dollars on lobbyists to oppose this. They are running ads in States opposing this. And I understand it, from their perspective, it is a hard thing to give up. But if we can take tens of billions of dollars at a time of tremendous economic crisis and make college much more accessible and affordable for hard-working Americans, middle- class, working-class Americans, I don't see how in good conscience we can stay on the sidelines. Ms. McCollum. Mr. Chair, I don't see how we are taking over anything except an opportunity for more children to have a chance at college. Thank you. Mr. Obey. Mr. Ryan. Mr. Ryan. I appreciate you doing that, too, Mr. Secretary. I mean, subsidizing the banks where they had no risk at all and, if someone bailed, we picked up the tab. I appreciate how you are doing that. ROBOTICS COMPETITIONS Two things. One, the issue of math and science. We have some programs in Ohio, robotics programs, they had the first competition and whatnot, just unbelievable, where you see kids get so excited and passionate about using their hands and conceptualizing what they are going to create. And the first competition is probably the most prominent competition around the country. When I think about robotics, I think about the old shop classes and how this is kind of like 2.0 in the shop classes. Secretary Duncan. The new shop. Mr. Ryan. Yes, exactly. Is there anything in this budget that would help local schools? Now a lot of schools can't even afford the start-up to get the kit and to pay the supplemental for the teacher. Secretary Duncan. Yes, I am a big fan. We talk about well- rounded education. I am actually going to go to the national championships, the national finals of the first competition. I am a big fan. And we talk about a well-rounded education. It is those kinds of opportunities again, whether it is robotics, debate, academic decathlon, music. So I worry in tough times that those extra curricula are often the first things to get cut. Those are things that keep students engaged and keep them motivated. So we want to continue to encourage a well-rounded education. I love those robotics competitions. INCENTIVES AND PUBLIC-PRIVATE PARTNERSHIPS Mr. Ryan. How can we create incentives? In Warren, Ohio, we have a great program at Warren Harding High School, and it is with non-traditional kids. They are not playing hoops, they are not on the football team, whatever. The reason they have been so successful is Delphi was a local corporation who was very involved in the start-up of the robotics program at the high school. So how do we create incentives for local manufacturers or local corporations to help contribute to these programs? Secretary Duncan. That is the thing. I think the start-up costs for the robotics competition are actually minimal, and it is easy. Again, that is where we can think about it at the Federal level. But I think that that is, at the local level, just going out to those businesses and saying, for a small amount of money, you create this huge life-changing, life- transforming opportunity for students. Those kinds of sponsoring partnerships are out there. Obviously, business is struggling now, and there are maybe fewer available dollars. But this is a low-cost, high-impact, high-visibility activity, where students from very non- traditional backgrounds are getting interested in science and engineering and thinking about a whole set of careers that they never would have thought about without this competition. So there is a huge amount of space for folks to be creative and innovative and build those public-private partnerships. Mr. Ryan. Most of these programs, you see these kids, they have like a 98 percent graduation rate, a placement rate in college, the military, something when they get out. PARTNERING OF SCHOOL DISTRICTS TO SHARE SERVICES One last question before we have to run, I am not for consolidating school districts or schools. I believe in the neighborhood school. I think that is very important. But there are a lot of services that I think school districts can share-- buying the food, buying computers. Secretary Duncan. Textbooks. Mr. Ryan. Textbooks, those kinds of things. Is there anything in here to create an incentive for school districts to partner with each other on those services? Secretary Duncan. When times are tough, what would you rather do, increase your purchasing power or lay off a bunch of teachers? I would much rather increase my purchasing power and keep those desperately needed adults in the building. So where folks are doing all these things--HR, buses, food, textbooks-- where they are doing it on an individual basis, that to me is just an absolute waste of money at a time of desperate need. Mr. Ryan. Are there any incentives in here? Secretary Duncan. We can think about it. I think this is one that is common sense. Mr. Ryan. Well, if we are relying on common sense--thank you, Mr. Chairman. Mr. Obey. Thank you. Mr. Secretary, let me simply summarize by asking two questions and then making a point. PELL GRANTS With respect to Pell grants, lest anybody think that we are being overly generous with them, when they were first instituted, the maximum Pell grant covered over 70 percent of the cost of going to a 4-year university. Today, despite the increases that we have had that has taken it from 32 percent upwards somewhat, we are still riding at about 37 percent. So we have hardly been overly generous. SAVINGS FROM DIRECT LENDING Secondly, with respect to student loans, I just want to read something that appeared in Roll Call last week. I want to quote two sentences. ``The legislation deserves GOP backing first and foremost because it eliminates government waste and saves billions. The choice is simple. Do we help Citibank make millions of dollars in profits from zero-risk student loans or find other ways to use the up to $87,000,000,000 in savings?'' That savings number comes from the nonpartisan Congressional Budget Office. The article was written by Dr. Susan B. Neuman, former Assistant Secretary of Elementary and Secondary Education under former President George W. Bush. IG AUDIT OF READING FIRST Let me also ask this question: I am sure that you are familiar with the Inspector General's alarming audit of the Reading First Initiative under the previous administration. The investigation concluded that Federal officials violated conflict of interest rules when awarding grants to States under the reading program and steered contracts to favored textbook publishers. The IG's report found that the program was awash with conflict of interest and woeful mismanagement. It also suggested that the Department of Education violated the law by attempting to dictate which curriculum schools must use. The report states that program review panels were stacked with people who shared the Reading First director's views and that only favored publishers or reading curricula could obtain program funding. ELIMINATING CONFLICT OF INTEREST IN COMPETITIVE AWARDS What is your Department doing to ensure that conflict of interest does not exist in competitive grant programs under your leadership? What kinds of measures have been put in place to prevent an outcome along the lines of the Reading First initiative? Secretary Duncan. First and foremost, we don't think we should be involved in curricula decisions. This has always been down at the local level and should not be driven at the national level. So we have no opinion, no stance, no interest, no investment, and are absolutely dispassionate on it. So in that spot you can't have a conflict of interest. We have tried to recruit people with the highest integrity and to do things the right way. We absolutely hope to be and should be and will be held accountable for that. All we want to do is invest in great ideas that are coming from the local level. But we have no agenda here, no interest in textbook publishers, and we don't think we should be playing in the curricula field whatsoever. ACTIONS TO PREVENT CONFLICTS OF INTEREST Mr. Obey. I am concerned not just about that narrow approach but across the board in the agency. If you can get us some more information for the record, that would be helpful. Secretary Duncan. I will. [The information follows:] Actions To Prevent Conflicts of Interest The Department has taken significant actions to prevent conflicts of interest in the implementation of our programs. On December 4, 2007, after the release of the Office of Inspector General reports on the Reading First program, the Department issued an internal directive, ``Improving Administration and Management of Department Programs.'' The directive provided all employees with program implementation guidance on a number of topics, including identifying a conflict of interest, prohibitions against controlling and directing curriculum and instruction, controls for the proper use of peer-review processes, and early and ongoing consultation with the Office of the General Counsel. The Department requires all employees to participate in annual training to ensure that they follow the policies described in the directive. The policies and procedures used in the Race to the Top competition provide a recent example of the emphasis that the Department places on ensuring that grant competitions meet the highest standard of integrity. The Department has taken several actions to ensure that the Race to the Top competition peer review process is conducted in an objective manner free from conflicts of interest. A document that describes the steps the Department took to identify potential, direct, and indirect conflicts of interest, as well as the appearance of a conflict of interest, is available on the Department's Web site at http://www2.ed.gov/programs/racetothetop/application-review.html. ORIGINS OF U.S. DEFICIT Mr. Obey. Let me say, lastly, with respect to the education budget, I hope that you will give no ground--I would ask you to put chart number one up. I would ask that you give no ground when people are suggesting that somehow the deficit is impacted in a major way by what we are doing in education. As that chart shows, if you take a look at the deficit which was inherited this year by the Obama Administration, $5.1 billion of that--I mean $5.1--I can't read my own writing---- Secretary Duncan. I think it is trillion. Mr. Obey. Yes, it is $5.1 trillion. I read better with my glasses off. These are new glasses, and they are not worth you know what. But $5.1 trillion of the 2009-2019 deficits were caused by tax cuts which were paid for with borrowed money and $1.8 trillion paid for by our entry into two wars, as I said yesterday, one I believe justified and one not. Then the economic collapse contributed $3 trillion to that deficit over that same period. Meanwhile, the Recovery Act--the entire American Recovery and Reinvestment Act, not just the education piece--the entire Recovery Act accounts for $1.1 trillion. I would simply suggest I don't offer that chart to critique Administration performances, because you are not done yet. But what I do do is to offer it to simply suggest that, in judging whether debt is useful or not and whether deficits are useful or not, we have to differentiate between what the money was used for. If the money was invested in items that simply add to economic consumption and immediate gratification, we have done ourselves no favor by borrowing that money. But if that money is used to invest in the long-term efforts to make this country independent from foreign oil, so we aren't shipping $400 billion a year to the Middle East to pay for our lack of foresight in energy; if we are investing in infrastructure that makes it cheaper to deliver products to market; if we are investing in education, which increases the competitiveness of our workforce and the quality of our individual lives, then those are investments worth making, provided that over time when the economy resumes its full level of performance, that we begin to pay that money back. To me, that is the way to look at it; and I would urge the Administration to give no quarter in setting the record straight on that. CHAIRMAN'S CLOSING REMARKS With that, thank you for coming. Secretary Duncan. Thank you for the opportunity. Thank you so much for your leadership and hard work. [The following questions were submitted to be answered for the record of the hearing:] [GRAPHIC] [TIFF OMITTED] T8233A.041 [GRAPHIC] [TIFF OMITTED] T8233A.042 [GRAPHIC] [TIFF OMITTED] T8233A.043 [GRAPHIC] [TIFF OMITTED] T8233A.044 [GRAPHIC] [TIFF OMITTED] T8233A.045 [GRAPHIC] [TIFF OMITTED] T8233A.046 [GRAPHIC] [TIFF OMITTED] T8233A.047 [GRAPHIC] [TIFF OMITTED] T8233A.048 [GRAPHIC] [TIFF OMITTED] T8233A.049 [GRAPHIC] [TIFF OMITTED] T8233A.050 [GRAPHIC] [TIFF OMITTED] T8233A.051 [GRAPHIC] [TIFF OMITTED] T8233A.052 [GRAPHIC] [TIFF OMITTED] T8233A.053 [GRAPHIC] [TIFF OMITTED] T8233A.054 [GRAPHIC] [TIFF OMITTED] T8233A.055 [GRAPHIC] [TIFF OMITTED] T8233A.056 [GRAPHIC] [TIFF OMITTED] T8233A.057 [GRAPHIC] [TIFF OMITTED] T8233A.058 [GRAPHIC] [TIFF OMITTED] T8233A.059 [GRAPHIC] [TIFF OMITTED] T8233A.060 [GRAPHIC] [TIFF OMITTED] T8233A.061 [GRAPHIC] [TIFF OMITTED] T8233A.062 [GRAPHIC] [TIFF OMITTED] T8233A.063 [GRAPHIC] [TIFF OMITTED] T8233A.064 Wednesday, April 21, 2010. FY 2011 BUDGET OVERVIEW: DEPARTMENT OF HEALTH AND HUMAN SERVICES WITNESS HON. KATHLEEN SEBELIUS, SECRETARY Opening Statement by Congressman Obey Mr. Obey. Well, good morning, Madam Secretary. Sorry to be late. I don't really have any good excuse. I just got involved in some things. Secretary Sebelius. I don't think the chairman is ever late, sir. Mr. Obey. Well, I think so. I detest being late. Anyway, let me welcome you here today. It is good to have you at a historic time, as you and your department begin to implement the health reform legislation we just passed. That debate has been going on a long time, and the Congress and the President have finally made some decisions. And, to me, the job at hand now is to try to implement it, make it work, see whether adjustments need to be made down the line, and make certain that it develops in a way which is beneficial to the American people. In this subcommittee, we have been doing a number of things to make health care more accessible, more affordable, and more effective. In the Recovery Act, for instance, we accelerated those efforts. For example, we have been expanding education and training programs to address the shortage of nurses, primary care doctors, and other health professionals and to encourage more practitioners to go into primary care and to practice in places where they are most needed. As far as I am concerned, that means especially rural areas. Our regular appropriation bills have increased funding for health professional programs by 35 percent over the past 4 years, and the Recovery Act included another $500,000,000 for that purpose. Another focus has been on prevention. We have provided a billion dollars for prevention and wellness activities to jump- start new efforts in this area. I should add at this point that one of my special concerns is the area of hospital infections. It just seems to me that that has to be at the top of our list, in terms of priorities. We don't do people any favors if we give 30,000,000 people additional access to health care and then they wind up dying because of something that they caught in a hospital. That happens at a disgracefully high level lately, and I think we need to be very aggressive in doing something about it. Our subcommittee has also emphasized medical research. That includes basic and applied research supported by the National Institutes of Health. It includes patient-centered health research to help practitioners decide which treatment works most effectively for their patients and thereby improves outcomes. The Recovery Act added $1,100,000,000 to support a major expansion of patient-centered research. Yet another priority has been to encourage a more widespread use of information technology and electronic health records to reduce medical errors and to make health-care delivery more efficient. In the 21st century, piles of paper are not the way we ought to be managing records that are vital to patient care. And, as you know, the Recovery Act included $19,000,000,000 to launch a major push for adoption of those technologies. Finally, we have the need to combat fraud and abuse in health programs. We increased discretionary funding for this purpose by 57 percent last year to support a wide range of activities, from reviewing Medicare claims to prevent improper payments to conducting criminal investigations. We held a separate hearing on that issue several weeks ago. While these and other health-care priorities are at center stage, HHS also has many other responsibilities. Its human services programs help families with access to child care, help low-income people pay their winter heating bills, and assist older Americans through programs like Meals on Wheels, to give just a few examples. The need for these services has grown during the current recession, and we have given the Department resources to respond in both the Recovery Act and our regular appropriations bills. The President's budget request provides further increases in some high-priority areas, including biomedical research at NIH, child care, Head Start, mental health and substance abuse programs, and health fraud and abuse control. On the other hand, I am not at all thrilled at the proposed 35 percent cut to LIHEAP, and I am also concerned that we are not yet well prepared to deal with public health emergencies like a flu pandemic or bioterrorism. I should also mention again that the administration has put us in a box--not you, but, frankly, the White House has--by one aspect of their budget submission because they have left a very large hole to fill with respect to Pell grants. And if we are going to meet our obligations in that area, we need to have that problem addressed, or a lot of people's priorities, including the administration's, will suffer greatly. So, with that, let me welcome you. I look forward to hearing from you. But first let me call on Mr. Tiahrt for whatever comments he might have. Mr. Tiahrt. Thank you, Mr. Chairman. As always, it is good to have Secretary Sebelius, the former Governor of Kansas, before the committee today. I have a great many questions for the Secretary, so, in the interest of time and the hope that we will get to at least two rounds of questions, I am going to be brief. Like many Americans, I have some very serious concerns about the recently enacted government takeover of health care in this country, what many refer to as ``Obama-care.'' I have concerns about what it will do to the quality of care people in this country currently receive, what it will do to small businesses and the people who work for them. And I have concerns about what it will do to our already-hemorrhaging Treasury. The level of spending authorized under this new law is breathtaking, not to mention the audacity of the Federal Government under this new law telling individual American citizens what they must do in regard to health insurance. Many of us opposed the new law and have serious concerns about what it means both in terms of the cost as well as the role of the government in health-care decisions. Over the last 2 years, the President has made a number of promises regarding this new health-care law. On June 15th, 2009, the President said, ``If you like your doctor, you will be able to keep your doctor, period. If you like your health- care plan, you will be able to keep your health-care plan, period. No one will take it away, no matter what.'' Well, with $130,000,000,000 in cuts to the Medicare Advantage plans, it sure seems like 11,000,000 seniors will be in jeopardy of losing their plan. The President also said, on March 25th of this year, that if you already have insurance, this reform will make it more secure and more affordable. Apparently, that is true unless you are one of the millions of Americans who buy an individual policy that you like and want to keep. I am also concerned about the pressure that the host of newly authorized programs will force on other important programs in this bill. There are at least $100,000,000,000 in specific authorizations that Congress will be expected to fund and countless billions in programs with wide, open-ended authorizations. We have no idea how high those costs will be. I could go on, but the bottom line for me is: What was promised isn't what was delivered. I look forward to the opportunity to ask a few questions. And I thank the chairman and yield back. Mr. Obey. Mr. Lewis. Mr. Lewis. Mr. Chairman, I would prefer to wait and listen to the Secretary and then ask questions. Mr. Obey. All right. Thank you. Ms. Secretary, please proceed. Secretary Sebelius Opening Statement Secretary Sebelius. Well, thank you, Mr. Chairman. It is good to be here in the subcommittee with you, with Congressman Tiahrt, and other members of the subcommittee. I want to thank you, first, for inviting me here today to talk about the 2011 budget, and I look forward to the opportunity to respond to questions. But I want to spend just a couple of minutes framing our budget, which I think advances the Department's central goals: improving the health of all Americans; expanding access to high-quality health care; and providing children, families, and seniors with the critical health services that give them a chance to thrive. To do that, we have tried to make prudent investments that actually echo the goals that the members of this subcommittee have championed for years: attacking health-care fraud with new tools and more resources; a new focus on preventing chronic disease and promoting wellness; emphasizing a reduction in medical errors and improving the overall quality of care; and strengthening our public health system so that we will be better prepared for new threats that come at us. At a time when so many American families are trying to balance their own household budgets, we think it is appropriate that we not let taxpayer dollars go to waste. So the budget reflects the difficult, time-consuming work we have done over the last year to try to eliminate waste and fraud and focus our resources so they can make the biggest impact on Americans' lives. Last month, you heard from our department's Deputy Secretary, Bill Corr, about some of the expanded efforts to identify, prosecute, and prevent health-care fraud as part of the new partnership with the Justice Department known as HEAT. And this budget, Mr. Chairman, builds on that progress. It adds new fraud-fighting funds to help us expand proven strategies, like putting Medicare fraud strike forces in cities that we know are hubs for fraudulent activities, and invests in promising new approaches like the systems that will help us analyze claims for suspicious activity in real time. When the budget takes effect, it is going to be a lot harder for criminals to get rich stealing from seniors and from the health-care system. And, over time, we believe the anti-fraud efforts will pay for themselves many times over. The budget also takes aim at medical errors. We know that the quality of health care in America varies widely, and, most tragically, in the case of tens of thousands of Americans who die every year from health-care associated infections, many of which are preventable. Chairman Obey, you have been a national leader for eliminating these unnecessary deaths, and our budget is aimed at helping to do that by doubling the size of the CDC National Healthcare Safety Network to 5,000 hospitals. You also mentioned the need to be ready for immunizations, and I want to thank you for your support of the CDC Section 317 immunization program, which we have asked to receive additional funds to make sure that all Americans have access to vaccines that are the best protection against some of our most dangerous diseases. Investments like these will help make sure that Americans get the best possible care when they are sick, but we also have to do a much better job keeping Americans healthy in the first place. So this budget builds on the Recovery Act's significant investment in health information technology, which moves us closer to nationwide interoperability and helps providers make health IT part of their daily routine. We try to build on the historic investment in prevention and wellness that Congress made last year in the Recovery Act with new efforts that will reduce the harmful effects of chronic disease in our cities and create a new health prevention corps and aim at preventing unintended pregnancies. And because minorities and low-income Americans are likely to be sick and less likely to get the care they need, our fiscal year 2011 budget makes critical investments in areas like community health centers and HIV/AIDS prevention and treatment so we can address the disparities that have plagued our health system and our country for far too long. HHS has spent our Recovery Act funds responsibly, balancing the need for getting these dollars into the economy with assuring the proper stewardship of taxpayer dollars. By January 2010, HHS Recovery Act recipients reported having created at least 30,000 new jobs and saving millions of jobs. The April report period has not yet concluded, but we fully expect those numbers to rise. By the end of September, we fully expect to obligate the remaining $6,800,000,000 in Recovery Act discretionary dollars available for fiscal year 2010. So these are just a few ways that our department will work to build a healthier America. At the same time, we will continue our work, which is already under way, to effectively implement many of the provisions in the historic health insurance reform legislation that Congress passed last month. The Affordable Care Act enshrines the principle that every American should have access to the health care they need. It also begins the transformation of our health-care system, with a wide range of new programs and incentives to promote the kind of coordinated, patient-centered, evidence-based care that has been shown to generate far better health outcomes. These changes, along with the investments in our fiscal year 2011 budget, will mean that Americans getting access to care as part of the Affordable Care Act will be joining a health-care system that is more consumer-friendly, provides more security, and, more importantly, does a better job at keeping them healthy. Those are the goals, but we cannot accomplish any of them alone. We rely on partners across the Federal Government and States and communities across the country. And no one has a more important role than those of you in the United States Congress. So I want to thank you again for the opportunity to be here today, and I would be happy to respond to the questions. [Prepared statement of Secretary Kathleen Sebelius follows:] [GRAPHIC] [TIFF OMITTED] T8233B.001 [GRAPHIC] [TIFF OMITTED] T8233B.002 [GRAPHIC] [TIFF OMITTED] T8233B.003 [GRAPHIC] [TIFF OMITTED] T8233B.004 [GRAPHIC] [TIFF OMITTED] T8233B.005 [GRAPHIC] [TIFF OMITTED] T8233B.006 [GRAPHIC] [TIFF OMITTED] T8233B.007 [GRAPHIC] [TIFF OMITTED] T8233B.008 [GRAPHIC] [TIFF OMITTED] T8233B.009 [GRAPHIC] [TIFF OMITTED] T8233B.010 [GRAPHIC] [TIFF OMITTED] T8233B.011 [GRAPHIC] [TIFF OMITTED] T8233B.012 Mr. Obey. Thank you. Mr. Tiahrt. HEALTH CARE REFORM Mr. Tiahrt. Thank you, Mr. Chairman. A while back, I found the comments made by our Speaker of the House, Ms. Pelosi, quite interesting. Specifically, she said on March 9th before the legislative conference of the National Association of Counties that--and I quote--``we have to pass the bill so that you can find out what is in it.'' My preference is that the American people know what was in the bill before it is passed, but I suppose that is just a philosophical difference. I was even more interested in a recent Rasmussen poll that shows that 56 percent of Americans believe that we should repeal Obama-care. In Kansas, it is over 70 percent, probably because four out of five jobs are small-business jobs, and there is a great deal of concern about what it will do to small employers. To be honest, I am not particularly surprised by that number, and I expect it will grow, since the American people are only now beginning to find out what has been done in the bill. This bill is widely unpopular. What is the most difficult part for the administration to sell to the American people? Secretary Sebelius. That is---- Mr. Tiahrt. Yeah, which part of this bill will be the most difficult to convince the American people that it is going to be good for them? Secretary Sebelius. Well, Congressman, I think there has been an extraordinary amount of misinformation about what the law is and what it isn't. And one of the jobs that we have, I think, moving forward and that I look forward to, frankly, is telling people what is in the bill. For instance, for small-business owners, there is a lot of misinformation about mandates that currently are not part of the law, and were never part of the law. So any employer who has less than 50 employees has not only no mandate but may be eligible for tax breaks that begin this year at 35 percent, helping to secure employee coverage, and, eventually, in 2014, will have access to a new market. You and I know in Kansas that small employers are often squeezed out of the marketplace, priced out of the marketplace, don't have the leverage, whether they are a farm family or a small-business owner, that the large employers have. They don't have negotiating power. And they will have---- COST OF INSURANCE PREMIUMS Mr. Tiahrt. Bringing up the costs---- Secretary Sebelius [continuing]. Opportunity through a State-based exchange. Mr. Tiahrt. I am sorry. I have limited time. Because of the cost, there was an article in the New York Times that talks about the effects the new law will have on insurance premiums that are routinely paid by ordinary Kansans, as you mentioned. Specifically, the article focuses on mandates contained in the new law that have been in place in New York, in Massachusetts, and a few other States. The article concludes that people who buy their own insurance--and that includes the self-employed, people who work for small businesses, and early retirees, those who do not yet qualify for Social Security--will have to pay, on average, an additional $2,100 for their health insurance. How does the administration justify forcing Americans who form the backbone of our economy, specifically those associated with small businesses, to pay an additional $2,100 for their insurance? Did we learn anything from Massachusetts, New York, and other States that have been doing some of these things that are contained in this new law, or is the New York Times wrong? Secretary Sebelius. Well, I would suggest that the New York Times may be pricing a policy in Massachusetts but is not pricing what will eventually be a State-based exchange in Kansas. The law is set up in a way that Kansas will have an opportunity, if they choose, to put together a State-based exchange to have the policies and programs be State-based. It doesn't import the mandates from Massachusetts and impose them on Kansas. It really is the law of the State of Kansas. So I haven't read the article, but the State-based exchanges, I would suggest, will make it much more affordable for those in the individual market or the small-group market to have affordable care, because they currently don't have the bargaining power and they are squeezed out or priced out of the market. Mr. Tiahrt. I will submit that article for the record, Mr. Chairman, if it is okay with you. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8233B.013 [GRAPHIC] [TIFF OMITTED] T8233B.014 [GRAPHIC] [TIFF OMITTED] T8233B.015 [GRAPHIC] [TIFF OMITTED] T8233B.016 INDIVIDUAL MANDATES Mr. Tiahrt. While I am not a lawyer, I am aware---- Secretary Sebelius. I am not either. Mr. Tiahrt [continuing]. That the Supreme Court has declared unconstitutional many Federal laws that contain individual mandates. However, the new health-care law contains a provision that appears to mandate that every individual in the United States must have some form of health-care insurance. Regardless of the lessons we have learned in Massachusetts and New York with respect to individual mandates, what makes this administration think that it can constitutionally mandate that every American must buy health insurance? And I ask specifically because there appears to be a fairly large segment of the American population that chooses, for one reason or another, not to buy health insurance even though they can afford it. This is a basic issue of liberty for me, not unlike deciding to purchase a house or rather to rent. So what is it about the mandate that we think we can impose on the American people? And do you think it will survive a constitutional test? Secretary Sebelius. Well, Congressman, I am also not a lawyer, but I have discussed the constitutional challenges with both our legal team and the legal team at the Justice Department, who feel that the Commerce Clause gives strong constitutional basis for the personal responsibility section of this bill. As you know, when Governor Romney signed the Massachusetts law, he felt that a critical piece of expanding health coverage was personal responsibility, that those who could afford, actually, to purchase coverage would do so; and if they needed assistance, that the State, in that instance--and, in our instance, the Federal Government--would provide that assistance, and there would be a waiver for those who couldn't afford it. It is the framework that we used to put together the Affordable Care Act, and I think at least the lawyers will debate this in the courtroom, but I am convinced that it does stand on the strong constitutional grounds. Mr. Tiahrt. Thank you, Mr. Chairman. Mr. Obey. Mrs. Lowey. MEDICAL LOSS RATIO Mrs. Lowey. Thank you, Mr. Chairman. And welcome, Madam Secretary. Throughout the health-care debate, one of my highest priorities was to enable the Federal Government to better track and prevent premium increases for consumers. One of the provisions in the new law involves medical loss ratio, requiring insurance to spend at least 80 percent of premiums on health-care services. This will a great benefit to those who cannot continue to pay skyrocketing premiums. The law includes a host of other cost-control measures, including allowing exchanges to bar access to insurers with unreasonable premium increases. By the way, I found in my district--I had countless meetings with large employers, small employers, individuals, hospitals, doctors, and I cannot tell you how many people talked about their rates being doubled in the last 5 years. So we have to do something about this in this bill. And if you could share with us, how does the budget request enable HHS to police insurers and protect consumers from abusive practices? And, more generally, are there any changes to the budget request that are necessary now that health-care reform has been signed into law? First, let's talk specifically about the medical loss ratio, and then whatever time is remaining, I would appreciate it. Secretary Sebelius. Well, the medical loss ratio, Congresswoman, as you suggest, is part of the Affordable Care Act. I am a former insurance commissioner, and I am familiar with looking at the kind of data that is currently going to be requested. So we have already reached out to the National Association of Insurance Commissioners to, as suggested by the law, have them help to frame the definitions that are used as part of the formula for the loss ratio. I have actually reached out, also, to my former colleagues, Governors across the country to remind them--and in some States there is the full range of rate review authority, and in other States they are really missing big pieces of it, like California and others who found themselves in a situation where they do not have prior approval of rate increases--to remind them that that may be a good thing to address in their legislative session. So we are aggressively putting together the framework for a review of medical loss ratios and working in very close connection with the State insurance commissioners and the Governors to do just that. I think that our budget, what we have done, Congresswoman, as part of the implementation of the Affordable Care Act is to stand up a new Office of Consumer Information and Insurance Oversight that is going to be charged with not only implementing the medical loss ratio standards but a whole host of the market conduct standards for insurance companies and working very closely with the State offices. STATE INSURANCE COMMISSIONERS Mrs. Lowey. Before we get to the next question, from your experience--and you interacted, I know, with other State commissioners before you took on these responsibilities--are there any States that are actually monitoring this issue effectively now? And I appreciate the fact that you said you had been meeting with the State commissioners of insurance. Are there any States that do it effectively? Secretary Sebelius. I think there are. There are some models out there that we look at very closely. Again, the State laws vary. So some States have what they call ``prior approval.'' Before a company can actually impose a rate increase, they have to submit actuarial data to the Department, have it reviewed, look at administrative costs, overhead costs, CEO salaries, and what portion of the premiums they are actually paying out in health benefits. Others have what they call ``file and use,'' where the company actually notices you that you have a rate increase and just files it with the Department. And some don't even have that. So there is a wide range of oversight. We are very hopeful that we can--this isn't, as you know, a Federal takeover of anything. It really is a State-based insurance regulatory system that stays a State-based insurance regulatory system. But we are working very hard with the States to remind them that this responsibility is theirs. We have asked--I actually went to the health insurers and asked that companies submit to our office at a minimum their actuarial information of what their overhead costs are, and what their benefit payouts are, so we can at least make it transparent to the American public. So far, we haven't had a terribly robust response, but I am hoping that we will. Mrs. Lowey. I look forward to your keeping us up to date on this. Because, from my perspective and many of my colleagues', we were moved to pass this legislation because, frankly, everybody, from small business to large small business, was just getting rate increases. And my time is up. And I look forward to continuing to hear from you and getting this information. Thank you, Mr. Chairman. Mr. Obey. Mr. Lewis. SINGLE-PAYOR SYSTEM Mr. Lewis. Thank you, Mr. Chairman. Welcome, Madam Secretary. I don't envy you the challenge you have before you. All of us face the same thing, but you are in a very special hot seat. In general, I would like to talk about medical errors a bit and a bit about Medicare. But before getting to that, as we have gone through this debate over the last year, it has become very apparent to any observer who has looked closely that the key players on the majority side--the President; the Speaker; the Speaker's closest advisor, Mr. Miller of Oakland; indeed, Henry Waxman--have been supportive of a single-payor system. Now, I know that is not the bill that we produced, but it lays the foundation for exchanges to become a lot more than State-based but, rather, Federal-dominated. And it concerns me an awful lot that we ignore that. Would you respond to you and your office's view of a single-payor system at the Federal level? Secretary Sebelius. Certainly, Congressman. I would be glad to. I think, from the outset of this discussion, there were certainly those in the House and the Senate who favored a single-payor system and felt that that was by far the preferable option. From the beginning, the President made it very clear that he did not, in spite of the fact that he had, in years in the legislature and even when he came to the United States Senate, talked about that as an option that would be ideal. The more he looked at the situation, with 180,000,000 Americans having insurance coverage that was preferable to them and that they liked, he felt that what we needed to do was build on the current system. And that is really the structure that the bill took from the outset, in spite of, I think, the disappointment of some in the caucuses who would have preferred to really dismantle the third-party-payor system. So this really starts at the States. States put together exchanges either as a single State or in a multi-State area, if that is what they choose. We provide technical assistance to the States to do that. And even though the timetable for exchanges doesn't begin until 2014, we intend, starting next year, to begin very robust discussions so that we don't wait until the last minute and have States in a situation where they can't do this. We have already had lots of positive discussions, and States are very eager to do this. And I think it will very much be a State-based program. And particularly, Congressman, it is not to dismantle what is in place right now. It is really to replace the market for self-employed Americans, many of whom cannot find affordable coverage, don't have any leverage, a lot of small-business owners who find themselves in the same situation. MEDICAL ERROR RATES Mr. Lewis. Madam Secretary, if I could take you to medical errors---- Secretary Sebelius. Yes. Yes. Mr. Lewis [continuing]. You suggest that, within the Department, you want to at least model some evaluation of medical errors to see how we can improve on that pattern within the health-care delivery system. Might I suggest that one of the major Federal medical health-care delivery systems lies within our military. There is plenty of evidence that there is rampant across this system an error-based system of delivery. I would suggest that you might start there and help us, with you, to evaluate what is going on in that medical health- care delivery system that supposedly is serving the most important servants we have in our society, the men and women who have fought for this country. Huge problem there. I would be interested in your reaction. Secretary Sebelius. I am sorry. I want to understand what you are saying, Congressman. We have begun, certainly, discussions with not only the VA but the Department of Defense on their system. But you are suggesting that there are rampant medical errors within the health-care system for---- Mr. Lewis. That is correct. There is evidence at the highest levels that system deliveries are, at best, producing an awful lot more errors than the norm. And we might start that examination right there. Secretary Sebelius. Well, I think that is a good point, and I will follow up on that. Thank you. MEDICARE ADVANTAGE Mr. Lewis. One of the President's major promises was that, if you like your health care, you can keep it. And yet, to pay for the new health-care plan, the law, it appears, would cut in a major way Medicare Advantage by more than $130,000,000,000. I have 50,000-plus seniors in my district who enjoy Medicare, and, indeed, they are concerned about what these proposed cuts might do to that service and existing delivery. What can my seniors expect relative to implementing this program? Secretary Sebelius. Well, I think that there is a provision, as you know, as part of the law that, over a decade, a portion of the overpayment to the Medicare Advantage plans will gradually be phased out. There are about 400 companies right now offering about 1,100 plans throughout the country. About 11,500,000 seniors taking advantage of those plans. We have just actually put out the 2011 Medicare Advantage updates, which will have the same rate payments for 2011 as they did for 2010, and noticed plans across the country. There will be a robust array of choices for Medicare recipients, as there are right now. I don't think there is any question that we are going to begin to pay more attention and collect more data, and the CMS, on medical outcomes, will be looking at not only the fee-for- service side of Medicare but also the Medicare Advantage side of Medicare to make sure that, if enhanced payments are going out the door, it is really for higher-quality health outcomes. And we know bundled care produces that, medical home models produce that. And there are a number of Medicare Advantage plans who are very eager to engage in that. But I think that the misinformation to seniors about the fact that Medicare Advantage is somehow not going to be a choice is just wrong. We anticipate that there will be no shortage of choices of Medicare Advantage plans throughout the country. Mr. Lewis. Thank you, Mr. Chairman. I must say, Mr. Chairman, that what she just mentioned is a major stumbling block. But if I were going to point to the greatest stumbling block, it is when the average family, let's say 25 to 45, suddenly finds a mandate, with the IRS looking over their shoulder, that they must start putting money into a pool for some future service delivery. Thank you. Mr. Obey. Well, I would say the greatest stumbling block is when people with insurance have to pay $1,000 a year to subsidize people who don't have it because we didn't have, until now, a program like this. Ms. Lee. DIVERSITY IN HEALTH PROFESSIONALS Ms. Lee. Thank you very much, Mr. Chairman. Good to see you, Madam Secretary. First of all, let me just thank you so much for your leadership in helping to move the historic health-care reform bill forward, for your steady leadership and your choice and your experience. And also, for those of us who were adamant about a public option in terms of keeping costs down and holding the insurance companies accountable, we are counting on you to make sure that that happens, short of having a public option. And so, thank you very much for understanding how important that is. Myself, Congressman Honda, Congresswoman Roybal-Allard, the Tri-Caucus was lockstep, very adamant, on addressing racial and health disparities as part of the health reform bill. And I would like for you to elaborate on how this budget actually supports the goal of diversity in the health professions through recruitment and training; how you increase diversity at NIH institutions and researchers, ensuring that the racial and ethic minorities benefit from any new, innovative health research at NIH; also, in terms of the direct support for our Nation's minority medical colleges, the targeted support to help eliminate these disparities within communities where we see them the most. And so, in this budget, I just want to see how you are shaping this. I know that this year the Office of Minority Health, through I think it is called the National Partnership for Action to End Health Disparities, has produced a draft report, a national plan of action on disparities. So I just want to get a sense of where you are on that. Secondly--and I will ask all my questions right away, and then you can respond. Secondly, national AIDS strategy: Current budget allocation? Who is going to lead the implementation of the national AIDS strategy? And what part of the current budget allocation--I think it is $70,000,000--that is going to HRSA and CDC will be dedicated to the national HIV-AIDS strategy? Thirdly, let me ask you about nursing, because I had a long conversation with the dean of the Samuel Merritt Nursing School in Oakland, and she indicated that just in the Bay Area alone, 40 percent of all new nursing graduates since October 2008 have yet to find a job. Yet I thought there was a nurses shortage in our country. I spend a lot of time, as I say to many, I spend a lot of time in hospitals. My mother is 85 years old. My sister has multiple sclerosis. And these are very good nurses, but we are always being treated by traveling nurses, nurses who have retired and who come to the hospitals to work because, I am told, that there is a shortage. And yet now the dean of the nursing school says nurses cannot find a job. So I would like to, kind of, get some sense of what you think is going on out there and what we can do to ensure that qualified nurses are being hired. And if I have any more time, I will ask some more questions, but go on and respond to those. Thank you again, Madam Secretary, and good to see you. Secretary Sebelius. Well, thank you, Congresswoman. I will try to hit the high points on the issues you raised. First, health disparities is, I think, a glaring failure of the health delivery system over years. And while our department I think has done a fairly decent job documenting health disparities, there has not been a very good strategy to actually reduce or eliminate health disparities. So the National Action Plan that you refer to is really the first time since 1985 that there will be a secretarial-level plan addressing health disparities. And it is one that I take very seriously. It is in draft form right now. We look forward to having a chance to preview it with you and to work on it. I don't think there is any question that passage of the Affordable Care Act is one of the most important steps we can make toward closing the gap. Over and over again, it has been identified that the lack of insurance, the lack of access to affordable health care is one of the underlying causes of health disparities. So a big step was made. Our budget, actually, will build on that effort in a number of ways. Not only will the Office of Minority Health focus with a strategic roadmap on this National Plan--and we see it not only within our department, but an across-government-agency effort, where health is impacted by neighborhoods, by food availability, and by the air you breathe. There are a lot of things that actually add or subtract from people's health. So we see this as a government-wide effort. We do have additional resources in the 2011 budget that look at recruitment of health providers from minority communities to make sure that we have not only people serving in underserved areas, but actually minority providers--nurses, doctors, health technicians, mental health professionals. As you know, the Affordable Care Act also made the Center for Minority Health and Health Disparities into an Institute at the National Institutes of Health which raises it to a level where it will have serious strategic focus and attention. So there are a whole host of assets coming together in a way that really hasn't been organized in our department. And, again, we look forward--I know this has been not only a cause that you have taken very seriously but your fellow Tri- Caucus members have been focused on for years, and I really look forward to working with you as we address these gaps and these underlying health causes. I would suggest, also, that the increased footprint for the Community Health Centers, which actually started in the Recovery Act and are, again, targeted to the underserved areas, as well as the efforts in wellness and prevention grants, will also help to close this gap. I can't respond very well to the nursing job shortage situation that you talked about because that is the first time I have ever heard of nurses not being snapped up immediately to be hired. I hear the other side of the story over and over again, that people need more nurses in the pipeline. And that is exactly what we have been doing, is trying to fill that workforce pipeline with more scholarships being paid off, more increases to the National Health Service Corps, more people in underserved areas. So I need to follow up on that. And then, finally, in the AIDS area, there is a national AIDS plan that is currently being formulated. It is not finalized at this point. As you know, President Obama has identified the fact that, while we had a very robust international HIV-AIDS strategy, we had kind of lost the attention and focus at the national level. We have already launched, under CDC, an outreach program on testing and particularly identified some of the most vulnerable communities that we are beginning to interact with, using social networking. But we look forward to the strategic plan, which will be led by the White House Office of National AIDS Policy and others who are focused on AIDS. There is a new AIDS Council, which will have a national and international focus. And we are going to be very intimately working with them. Mr. Obey. Mr. Rehberg. HIGH RISK POOLS Mr. Rehberg. Thank you, Mr. Chairman. Temporary high-risk pools in Montana--I understand you have been in contact with our auditor already about it. But I noticed in the appropriations $5,000,000,000 was taken out of the general fund to pay for the high-risk pools around the country, but CMS is suggesting that the money will run out in 2011 and 2012. And, of course, they don't have to be in place until 2014. Why the shortfall? Well, why the anticipated shortfall? And are there other areas that you see it is already coming in over-budget? Secretary Sebelius. Congressman, we don't know exactly how many people will be able to be enrolled in the high-risk pool. A lot of States offer high-risk pools right now. I think Montana-- Mr. Rehberg. Which is one of the reasons we wondered why we did this in the first place. If we already had the high-risk pool in place, why supplant it with something created by the Federal Government to do something that we already had in place? Secretary Sebelius. Again, this is a totally voluntary program, first of all. Secondly, it won't be created by the Federal Government. If Montana chooses to set up what is a parallel pool, the money that is allocated in the Affordable Care Act is to subsidize rates so---- Mr. Rehberg. The point is---- Secretary Sebeli [continuing]. They don't rise above 100 percent in Montana. Mr. Rehberg. Correct. Secretary Sebelius. They are well over 100 percent of the market right now, and it makes it very unaffordable for lots of folks. Mr. Rehberg. But my question is, you asked for $5,000,000,000, you got $5,000,000,000, and CMS is already anticipating it will not last through 2011 or 2012. And the high-risk pools are not to be in place by 2014. A shortage, a shortfall, an overexpenditure. How are you going to deal with it? Are you going to limit access? Secretary Sebelius. Again, sir, this is not a Federal program. If Montana chooses to participate, they will have an allocated set of resources, which helps subsidize care for Montanans who currently are uninsured and uninsurable. Mr. Rehberg. Madam Secretary, you---- Secretary Sebelius. If they choose not to participate, that is a choice that the State will make. Mr. Rehberg. Let's go back to the question. The question was, the legislation created high-risk pools, or the opportunity to create a high-risk pool---- Secretary Sebelius. That is correct. Mr. Rehberg [continuing]. By 2014. Secretary Sebelius. No, sir. Right now. This is the bridge strategy to a new market---- Mr. Rehberg. Correct. Secretary Sebelius [continuing]. In 2014. Not by 2014. Mr. Rehberg. That is correct. But, by 2014, an alternative structure needs to be in place. Secretary Sebelius. The exchanges. Mr. Rehberg. Correct. But if the exchanges are in place in 2014 but you are using Montana and the other States' temporary pool, and if you appropriated $5,000,000,000 and it is not going to make it to 2014, you are going to have to come back to this Appropriations Committee and ask for more money. You have already anticipated that it is going to cost more than you told us it was going to, in asking that the legislation be passed in the first place. Secretary Sebelius. Sir, currently, the Federal Government pays a fraction of a State's high-risk pool. It puts about $50,000,000 into an overall plan. This is an attempt to provide a safety-net coverage if the money actually is going to have a shortfall. Mr. Rehberg. Madam Secretary, with all due respect, that doesn't answer the question of the shortfall. I understand the bridge. I understand that you are going to cooperate or participate or help the States. But you said it was going to cost $5,000,000,000, your anticipated expenditure, and it is not. Secretary Sebelius. Well, we don't know what it is going to cost, and I would---- Mr. Rehberg. So you disagree with CMS? Secretary Sebelius. We don't even know how many States want to participate in the program at this point. We put out a letter to Governors. I talked to my former colleagues yesterday. We will, by April 30th, have some idea. I mean, we really don't know, at this point, sir. PROHIBITION ON LOBBYING WITH FEDERAL FUNDS Mr. Rehberg. Okay. The second line of questioning that I would like to go down the path--in the stimulus package, the law certainly says you can't lobby. Secretary Sebelius. Correct. Mr. Rehberg. You know, a bastion of information from CNN. State of New York, obesity, educate leaders and decision-makers about trans fat--this is a $3,000,000 grant award. Santa Clara, California, advocating for an increased statewide tobacco tax. The city of Chicago, tax increase at the city, county, and State levels. Iowa Department of Public Health, $3,300,000,000, inform local policymakers about evidence- and practice-based pricing. That sounds like lobbying. Secretary Sebelius. Congressman, I read the same information from the same news source. I can assure you that we will follow to the letter of the law the Federal law which prohibits Federal funds and has, not just in the Recovery Act but consistently, prohibited lobbying with Federal dollars. We will track that very carefully. We have already notified a whole host of folks that that is the law of the land. That was part of the grant application and will continue to be part of the monitoring. Federal funds will not be used for lobbying. Mr. Rehberg. Okay. Because those were all quotes from the grant application in the first place. Secretary Sebelius. A lot of the applicants have a whole host of strategies that they employ, have employed historically, and will continue to employ. We are funding programs that are not lobbying programs. They are actual prevention---- Mr. Rehberg. But your oversight missed it in the initial grant application. Secretary Sebelius. Pardon me? Mr. Rehberg. Your oversight missed it in the initial grant application. The grant application had those exact quotes in it. Secretary Sebelius. They have been notified that there is an absolute prohibition for using any Federal funding for lobbying. And we will follow up on that very carefully. Mr. Rehberg. Thank you. Thank you, Mr. Chairman. Mr. Obey. Ms. Roybal-Allard. Ms. Roybal-Allard. Welcome, Madam Secretary. PREVENTION AND WELLNESS FUNDING Last year, the American Recovery and Reinvestment Act made $650,000,000 in prevention and wellness funding available for chronic disease prevention and management. And this year, when Congress passed the Affordable Care Act, it included a $15,000,000,000 Prevention and Public Health Fund, of which $500,000,000 is, I believe, available this year. And, as I understand it, these new funds are not restricted to chronic diseases but are meant to fund the entire spectrum of public health efforts. I have been told that your office is currently working on a system to distribute the funds this year. However, there seems to be significant concern in the infectious disease community that, in an effort to obligate the $500,000,000 by September 30th of this year, the Department will fund only existing grant applications for the ARRA of chronic prevention grants and that infectious disease programs will once again receive no funding. Can you please outline how you plan to allocate these funds and whether you will include new applications for prevention funds to target infectious diseases such as HIV-AIDS, viral hepatitis, sexually transmitted diseases, tuberculosis, many of which are at crisis levels in many communities? And what strategies is your department undertaking to address these infectious-disease disparities in our minority communities? Secretary Sebelius. Congresswoman, I would suggest that, at this point, as you have identified, conversations are going on with Members of the House and the Senate about the strategies for allocating these funds. So no decisions have been made, at this point, about either using traditional applications or not. But we absolutely want that kind of input and, you know, look forward to working with you on a plan. I think that the effort will be to actually build on--as you know, the investment in the ARRA funds was really a first- time-ever investment in wellness and prevention and strategically focused, at least in the community grant applications, on two underlying causes of chronic disease, which were tobacco cessation and obesity. This is likely to be a broader area. There are lots of ideas and good strategies about how to use this. We are looking carefully at the scientific data, at the evidence-based programs. I can guarantee you that what actually has been demonstrated to work will be one of the guiding lights. But I would say that discussion is very much under way, and we would appreciate your input. Ms. Roybal-Allard. So they are still open with regard to funding infectious disease? Secretary Sebelius. Yes. REDUCING CESAREAN BIRTHS Ms. Roybal-Allard. Okay. As you are aware, the United States spends more on maternity care than any other country in the world. However, we rank 41st in the world in maternal mortality and rank 30th in infant mortality. While we know there is an extensive body of research regarding best evidenced-based practices in maternity care, our health-care providers seem not to be following that research. For example, despite Healthy People 2010 goals of reducing Cesarean births to 15 percent, the United States continues to have a 31.8 percent Cesarean section rate. Given the risks that are associated with medically unnecessary Cesareans and the extraordinary costs associated with Cesarean births, is the administration doing anything to refine our care system to support the best and most cost- effective, evidence-based care to reduce the rate of C- sections? Secretary Sebelius. Congresswoman, I am not sure I can speak with any specificity about what actions are currently being taken in dialogue with providers about the C-section rate beyond just publishing the data and highlighting the data. I can tell you that our Office of Women's Health is very focused on maternal and child health issues and, frankly, what are pretty dismal health results, as you suggest--high expenditure and not terrifically good results. I, again, think that the Affordable Care Act makes a big step in the direction of getting affordable prenatal care to pregnant women. That will be a major step forward---- INCREASING BIRTHING CENTERS Ms. Roybal-Allard. I am sorry to interrupt, because I see my time is up, but I did want to know whether or not, since the new law requires Medicare to cover care provided in all free- standing birth centers at a cost of $6,000 less, is there any consideration in the initiatives to increase the availability of licensed birthing centers across the country? Mr. Obey. Very brief answer. Ms. Roybal-Allard. Is that being looked at? Secretary Sebelius. I can't answer that, but I will look into it. [The information follows:] Increasing Birthing Centers Thank you for your interest in the Medicaid program and the availability of licensed, free-standing birthing centers. As you know, section 2301 of the Patient Protection and Affordable Care Act of 2010 (the Affordable Care Act) requires the States to cover services provided by freestanding birth centers as a mandatory service under Medicaid. Currently, we are focused on implementing and providing technical assistance to the States on this provision. We expect that States with licensed, freestanding birthing centers will build a foundation for expanding these services to the Medicaid population and that their experience will be instructive to other States considering expanding the availability of such centers. Ms. Roybal-Allard. Okay. Thank you. Mr. Obey. Mr. Alexander. FMAP FORMULA Mr. Alexander. Thank you, Mr. Chairman. Madam Secretary, I have two questions. One is about FMAP. Congressman Cao and all of the Louisiana delegation, as cosponsors, are supporting a piece of legislation to address Medicaid reimbursements or Medicaid costs. Governor Jindal is supporting the legislation, as well as Secretary Levine from the Louisiana Department of Hospitals. They are in a legislative session today dealing with the shortfall there of a half a billion dollars. My question is, what is being done to prevent States like Louisiana, who were unfairly, when you look at the FMAP formula--because we got a lot of money, as the State of Louisiana was recovering from the hurricanes. Louisiana was looked at as being a State that was financially better off than they really are. So what are we doing to prevent Louisiana or any other State, like yours, that received financial help from appearing to be wealthier than they really are and, therefore, suffering because of the Medicaid? Secretary Sebelius. Congressman, we have spent a good deal of time with not only your State health officials, your Medicaid director, the mayor-elect of New Orleans, and others, Senator Landrieu, on this situation. Frankly, one of the reasons I think that there is now a legislative discussion is because the law is pretty clear that we don't have administrative flexibility to change the calendar years for which the income level is calculated; and that is really the situation, is when the count began what the income level is and how it was calculated. But we are working very closely with them, well aware of the anomaly that income appeared to go very high because half the population was, frankly, gone and not counted and probably inaccurately reflects what is the true medical count. And if we can have a legislative fix, we will try to move it very, very quickly. But we have our hands tied in terms of what administratively we can do for this situation. But I think it is really worth looking at. As you suggested, it is not only Louisiana but what happens post-disaster in an area where Federal funding may come in as an aid after the fact, but then the result is a calculation that isn't a very accurate picture of what the financial wherewithal is. HEALTH CARE FRAUD Mr. Alexander. Thank you. Chairman Obey a little earlier said something about a meeting that we had a few weeks ago about fraud. During that meeting, we heard all kind of reports about the number of physicians and other health care providers that were using sometimes information obtained from the inside to defraud the taxpayers. I asked the question about the number of individuals from the inside that might have been found doing something wrong. Again, I am not pointing fingers, but I just find it almost impossible to believe that there are numbers of individuals on the outside committing fraud at the numbers that we are hearing about without getting some help from the inside. When we talk about organized crime--and that term was mentioned--organized means at least two. You can't have organized crime with one. So I asked the question. I have not gotten an answer. I have had staff members to try to find out if in fact there are any individuals on the inside of any of the departments at all levels who have been found guilty of helping those on the outside. Can't get an answer. There is no answer or either they won't give it to us. Secretary Sebelius. Congressman, I can tell you I am not aware--and I will make sure we get this data and get it right back to you--I am not aware of if you are talking about State and Federal employees who have been charged and found guilty. I do know if ``inside'' means providers and not necessarily just doctors but so-called equipment providers and home health providers, there are dozens and dozens of insiders in that instance who have been charged and prosecuted, which is really the only way that we would be able to document if they have actually been found in some case. But I can get that information to you. That is the kind of thing that I think the new fraud effort is attempting to crack down on, people who pretend to be providers, if you will, set up sham operations, bill. But they are not necessarily part of organized crime. They are just operating as insiders but really conducting fraudulent activities. But we will circle back right away and get you that information. [The information follows:] Health Care Fraud The HHS Office of Inspector General's (OIG) Office of Investigations (OI) has one known case where an employee was complicit in a health care fraud scheme. In the Los Angeles Region, two Centers for Medicare & Medicaid contractors admitted to receiving money, $15,000 and $5,000 respectively, from an outside source to process provider applications. One individual received 3 years probation and was fined $1,000, while the other received 2 years probation and was fined $5,000. Because many of the providers who had applications expedited are subjects of on-going investigations, the total loss to the Medicare program has not been fully determined. However, it was determined that one provider involved in this scheme, caused a $3.2 million loss to the government. Additionally, it is believed that at least one entity bribing the employees in this case is connected to an organized criminal enterprise, and there may be additional employees identified in this scheme. Instance of ``insider'' fraud within the Department or involving its employees are extremely rare, and when identified, are taken very seriously and investigated to the fullest extent by our law enforcement partners. Mr. Alexander. Thank you. Mr. Obey. Ms. McCollum. MEDICARE REIMBURSEMENT Ms. McCollum. Thank you, Mr. Chair. To the gentleman's question, I know the Department, unfortunately, I have to report, in Minnesota found two internal problems with fraud. So you do do internal audits, and I am sad to report that there were people in Minnesota involved in it. I am happy that they got caught. I would like first, though, however, to commend Chairman Obey for his ongoing instrumental leadership in fighting for the best value and quality in health care. That just leads to a lot of hearings that you have had before and the hearing we are having today. I would like to congratulate you on the passage of the health reform bill. Your work and the work of the administration were key to ensuring that health care reform became a reality. I believe that the current Medicare payment system is deeply flawed and too many hospitals and providers shoulder the burden of unfair Medicare reimbursement for high- quality, low-cost care that they deliver, my State being one of them. I look forward to working with you as you convene the National Summit on Geographic Variation, Cost, Access, and Value in Health Care this year. And on this issue and the timing implications for some of the fact finding that you are looking at and for the implementation of change, I am going to submit some of those questions for the record. HOSPITAL ACQUIRED INFECTIONS Ms. McCollum. So I would like to spend my remaining time talking about hospital-acquired infections. We are here today to learn how to work more effectively with you to improve the quality of our health care system for all Americans. Hospital- acquired infections contributed to almost a hundred thousand deaths. In a recent report, HHS concluded that hospital infections merited urgent action. We know that hospital infections add $28 to $33 billion to our national health care costs. This is a serious public health care concern, because are we not only paying the cost, there are patients paying for these mistakes with their lives. HHS has set out a goal to reduce hospital-acquired infections by 10 to 20 percent in 2 years, and 50 percent within 10. But we are far from reaching that goal. We know that most of these infections are preventable through low-cost techniques. There is a New York Times article that even talks about how we have had remarkable progress in reducing infection rates but how many of the hospitals have not yet worked to overcome these infection rates because they are in an entrenched medical culture which is not changing. My State has worked to lower infections, and I know others are doing that as well. You have examples at your Department on how we can reduce infection rates. But the report also points out that infection rates have gone up 8 percent. So here are my questions: Is the 8 percent increase because of better reporting, whether it is voluntary or mandatory? Because you can't address a problem until you know and you face the fact that the problem exists. What are some of the obstacles to addressing this issue? Does the agency need this committee or the policy committee to work more closely with you to address this public health care concern moving forward? Secretary Sebelius. First of all, Congresswoman, I think your targeted concern is one that is a huge issue, and it is not only a huge cost issue, it is a huge safety issue. I know the Chairman has been working with you and sort of focused like a laser beam on this. The notion that we have a hundred thousand deaths a year from what happens to people when they are in the hospital, not what brought them in the first place, is, frankly, totally unacceptable. And hundreds of thousands more in just high-cost, longer-care strategies and lingering diseases. So it is a very serious issue. We know what works. It has been demonstrated and proven. It has never been taken to scale. So I think a couple of things are happening simultaneously. First of all, the notion of increases, I would say, is a part of better reporting. It also is a snapshot of the past. We are hopeful that more current data gives more encouraging signs. This focus by the Department, by this Committee, through the Recovery Act, through the Affordable Care Act, and through our budgets, I think is relatively recent. Secondly, there is no question that it is a question of focus by hospitals. You have required as part of the Affordable Care Act that all hospitals now have to report, which is a big step forward, and that reporting will be much more transparent to consumers and others, which is, again, a big step forward. Third, we are putting real resources both to States for more frequent inspections and to hospital systems to encourage the adoption of the strategies that we know work. Fourth is the electronic medical records. I was in a hospital in Cincinnati 2 weeks ago, in Children's Hospital, which does some of the most complicated surgeries on infants and even prenatally that I have ever seen. They have embedded into their electronic records system the checklist that we know works to reduce hospital infections. They have gone a thousand days without any safety concern. It is a great example of what meaningful use in an electronic records system can do, which is embed the kind of safety checklist, make sure it is done time and time again. If you can do it in that type of environment, we can do it everywhere. So I think there are some resources coming together, but I can tell you that it is something that we take very, very seriously. And I think it is not only huge costs, but we are killing people by our health care system. Mr. Obey. Mr. Cole. MEDICARE REIMBURSEMENT RATES Mr. Cole. Thank you, Mr. Chairman. Madam Secretary, thank you for being here today. As I talk to hospitals in my district, and it is a pretty rural district, a lot of small town, lot of Medicare- and Medicaid-intensive facilities, most of them are expecting, and this is not through your actions or through the health care bill, the Medicare reimbursement rates are being cut. They are going down. They look on the Medicaid new population that they will be getting under the health care bill as largely a break- even deal for them. They are really not making money off of that. They are very worried about what is going to happen to the private provider part of reimbursement. Because the point has been made here earlier, private insurance subsidizes the uninsured, but it also subsidizes Medicare and Medicare to a large degree, because those programs don't break even on costs. So they are looking at their future, and they are wondering where the dollars will come from for them to literally keep their doors open. And then the people in the larger cities wonder what happened to those smaller hospitals that closed and that population base is moved into their facilities. So I would like you to just walk through how you see hospital reimbursement rate developing over the course as you phase in the new health care bill. Secretary Sebelius. Congressman, I think that is a great question. Whether it is in rural areas in your district or in a State like Kansas, or in urban areas, I think every hospital administrator who I have talked to in the last 10 years has seen their uncompensated care rate rise. So there is currently a population with no payment stream at all and then insufficient payment streams and then private-payer streams. So I think one of the features of the Affordable Care Act is to actually have a payment stream arguably under every patient who comes through the door. It is one of the reasons that a lot of the hospital systems worked carefully with us on the framework of health reform. I do think that there also is an effort where the kind of bundled care strategies--again, hospital providers are very eager to have a payment system which actually looks at ways that they can be more appropriately compensated for keeping people out of the hospital. Right now, the only way they actually get compensated is if somebody actually comes back into the hospital. And the sorts of embedded directional changes in the delivery system for health homes and bundled care and accountable care organizations actually have, I think, some huge advantages for hospital systems to have a more appropriate reimbursement system and actually keep people healthier in the long term. I would say the third piece of the puzzle is a lot of hospitals right now, particularly through emergency rooms, are delivering care which could much more effectively be delivered in a primary care setting, in a community health center, in a variety of areas. They have begun to work on strategies to kind of triage that care so they don't have to have this robust sort of preventive care, and that I think is also part of the new structure. Mr. Cole. A lot of, again, my facilities are concerned with, again, on the private end of it is where they make the money to, frankly, reinvest in technology and facilities. They don't make that off Medicare. They don't make it off Medicaid. So they are really worried, are we going to crowd out the private market here and they won't have the money they need to give patients the best service that they possibly can give. Secretary Sebelius. Well, I think with the exchange opportunities, the private market, I would suggest, may be stronger. What is happening right now, and has happened over the last 5 years certainly, is more and more small employers have dropped their private coverage because they can't any longer pay the premium. A lot of individuals lost insurance when they lost their jobs, but I think the restabilization of a marketplace, of a private marketplace with larger purchasing pools but then stabilizing that coverage that people have is actually going to be good news. Mr. Cole. I hope so. I think that is a point worth making, though. Because a lot of my friends who favor the public option think, forget where the money comes from that actually allows health care to be delivered. It is very heavily from the private sector. You overpay, quite frankly, if you are on private insurance already. We know that problem was alluded to earlier. But that also supports Medicare, Medicaid, and, frankly, the new health care insurance bill as well. So I would be very careful about killing the goose that has actually provided the eggs for everybody else. Secretary Sebelius. Well, as you may know, of the 32 million or so estimated new enrollees in a health insurance system, the majority of those individuals will be in the private market, will not be in the public market. Mr. Cole. Thank you, Mr. Chairman. Mr. Obey. Mr. Honda. HEALTH INSURANCE COSTS Mr. Honda. Thank you very much. Welcome, Madam Secretary. Just to pick up with your last comment, the additional 32 million that will be added to the population, would that tend to drive the costs down across the board in terms of insurance premiums if we have the other things in place like the antitrust provision and a public option? Secretary Sebelius. Congressman, what I think is anticipated to cost less is--first of all, the market right now is pretty fragmented. So if you are an individual buying your own coverage, or a small business owner, one health incident, one cancer survivor, one heart attack puts you in a very expensive category. Pooling that risk into an exchange, a much bigger purchasing pool, I think helps balance the costs overall. I think it is one of the reasons that costs will come down. Hopefully, a number of the underlying features that actually lower the overall health care costs also are impactful in terms of the health insurance costs. Mr. Honda. It seems to me that that is something that we can work towards and anticipate. We do know, though, if we don't do anything, we have 47 million people without insurance and the costs continue to rise. In the last 18 months, at least in California, the premiums have gone from 30 percent one year, 38 percent this past year, in terms of premiums increase, in light of the debate we had already. So I am not sure the word is arrogant, but it sure is pretty bold to do that while we are having a debate on the high cost of insurance. I want to thank you for taking on this job. It is a massive job; and I think it is a very complicated, complex job that you have. But I am looking forward to working with you on this. I would note that the State you do come from is a very active State and very vigorous folks. I was pleased to see that a Congressperson did vote for the bill. I think that in my own district, District 15, which is Silicon Valley, which has probably the highest per capita post- graduate folks, probably the highest average income in this country, I had something like 70,000 folks who were uninsured. That is almost 10 percent of my population. It doesn't mean that they were unemployed, but they were uninsured. A fellow who ran against me for office when I first ran, a young man, a good friend of mine, said that in the current situation he would not be able to go into business for himself because his child has a pre-existing condition. My past opponent and friend said, go for it. It is important for our country. What is important for our country also is that we know that we have a viral hepatitis issue in America and globally, and we know that more Americans have chronic viral hepatitis. There is more of an incidence of that than HIV/AIDS, and the disease is 100 times more infections than HIV. While I am grateful to the President for requesting an increase for the division in your 2011 appropriation budget, I am glad that Assistant Secretary Koh, with whom we had met, had begun two major interagency tasks forces on this issue. We are very appreciative of that activity. PREVENTION AND PUBLIC HEALTH FUND I am also aware that there is about $500 million for prevention and wellness funds that is made available through this bill. But there is nothing that says how it is going to be spent. Do you have any idea how your Department will be looking at that and how it will be spent? Secretary Sebelius. Congressman, I think that we are still seeking guidance from Members in the House and the Senate about that 2010 appropriation for the prevention funds. We did invest in prevention in 2009 and 2010 as part of the Recovery Act, and we see this as an opportunity to amplify and maybe look in some other directions, but those conversations are under way, and we would appreciate your feedback. Mr. Honda. We certainly will be willing to do that. Mr. Obey. The gentleman's time has expired. Mr. Ryan. PREVENTION AND MINDFULNESS Mr. Ryan. Thank you, Mr. Chairman. I want to personally thank you for all your leadership with regard to the health care reform efforts in trying to push it through. I think history will judge us well, bringing a level of social justice to this country that we haven't seen. One of the things I mentioned before when you were here that I have been dealing with and working with for the past few months and years is the issue of stress in our society. I think as we talk about health care reform and the technology and everything else that there is a growing body of evidence, not just in the area of health care, of mindfulness and contemplative practices and their benefits on reducing stress levels and allowing our body to heal itself. So as we are moving 30 million more people into the system, there is inevitably going to be more costs, and I think we have dealt with that. And it will reduce costs, and I think we have dealt with that. But we need to, I think, pursue--and Mr. Honda just mentioned prevention. I know there is going to be a panel to evaluate what preventive measures actually work. So if you can just talk about that. But I would also like to encourage you that on that panel should be somebody who has been in the field, working in the field of mindfulness-based stress reduction. I think it is the most cost-effective way to drive down health care costs. It is about individual responsibility. It is about teaching people to manage their own health right in line with everything else we are talking about. So I want to encourage you to do that. It is not just in the area of health. The Defense Department is now doing this for pre-deployment for soldiers who are going over, allowing them to--and hopefully prevent a lot of the post-traumatic stress that goes on when these kids go into battle. So I want to encourage you to do that. If you can talk for just a second about the panel that is going to be created to evaluate adequate preventive measures in the health care reform bill. Secretary Sebelius. First, Congressman, I am all for looking at any strategy we can find that is successfully reducing stress. I am at the front of that line. I would be grateful for that evidence. I think that whether it is in this instance or the framework for the services, with the exchanges or others, certainly we will put together a very broad-based group of experts and look at what the evidence says. And in this area I think there are a number of cost-effective sort of patient-centered strategies that really do work. And so I look forward to getting the information from you and making sure that is part of the discussion. Mr. Ryan. I will get it to you. I was at a conference this past week and there was someone from Ms. McCollum's district at the University of Minnesota. They are offering basically a stress reduction class for incoming freshman. There is a 50-person wait list. So this is something that is throughout our society. So I think your leadership on this could be critical. PRIMARY CARE PHYSICIAN SHORTAGE Another question I have, and it is something one of my colleagues mentioned, the shortage of nurses, is the issue with primary care physicians. If you can touch upon that and how we are going to try to bridge our way through that. Secretary Sebelius. I think there is no question we need more health care providers altogether, but we also need more of the providers to choose primary care, gerontology, family practice. So a couple of strategies simultaneously. One is using more of our loan repayment and scholarship funds to attract people to those fields at the outset and pay off more of the debt for health care provider training in the areas that we see the biggest needs. As you know, the Affordable Care Act had a feature which actually, again, moves primary care providers for a couple of years with 100 percent Federal funding from Medicaid rates to Medicare rates, which I think is, again, a big step forward to more adequately compensating the kind of work they are doing. Mr. Ryan. How about the bridge between those kids that they are going into school now maybe and they are saying, yeah, it looks like primary care is going to be an opportunity for me. But in 2014 they will be just getting their bachelor's degree or their BS degree and moving on. Secretary Sebelius. We are changing the Medicare pay rates, also. I think payment of debt once you get your medical degree is also a pathway to a much more robust primary care system. That is what I hear from medical students all the time, that they are in a real financial box in terms of not being able to pay off their loans and being inadequately compensated once they become providers. So we are looking at both ends of that puzzle. Mr. Ryan. So you think they will move over immediately. Secretary Sebelius. I do. Actually, we have seen an increase already this year in primary care choices made by first-year residents. It is up about 20 percent. Mr. Ryan. Great. Thank you. Mr. Obey. Ms. DeLauro. HEALTH REFORM COMPLIANCE AND ENFORCEMENT Ms. DeLauro. Thank you, Mr. Chairman. Welcome, Madam Secretary. Thank you for your efforts in helping us to pass what is historic legislation. I know that your Department is working overtime to make sure that we begin the implementation of this legislation and that the people of this country can really experience the benefits as quickly as possible, whether they are small business owners or seniors or young adults or parents or people who have a pre-existing condition. We have already seen a couple of instances where insurance companies seem to be changing their behavior in response to the bill. On the positive side, we have seen several companies who plan to move ahead of schedule to let adult children stay on their parents' plan until age 26. But there are instances in which we will need to watch insurance companies closely to make sure they are following the new rules that have been laid out. For example, some reports, including the Senate Commerce Committee, indicates that insurers may be manipulating their medical loss ratios, reclassifying certain expenses to make it look like they are spending at a higher percentage of the premium dollar on medical care in order to meet the standards in the law. The Affordable Care Act included rate review provisions, including grant funding to assist States carrying out rate reviews to stop insurance from hiking those premiums to unacceptable levels. This law now bans a host of insurance company abuses: rescissions, denials of coverage for pre-existing conditions, gender rating, and health status rating. Let me just lay out the three pieces of this question, and I will let you go. What resources and tools does HHS and the Department of Labor need for enforcement of health reform and holding insurance companies accountable? With regard to medical loss ratio, how are you going to work with the National Association of Insurance Commissioners to ensure that terms like clinical services, activities to improve quality are defined appropriately, that do not include more routine activities that are more typically classified as administration expenses? Today, in the New York Times, there is an article that says, Senate bill sets a plan to regulate premiums. The Federal Government could regulate rates in States where State officials do not have sufficient authority and capability to do so. Let me ask you to comment on that. So if you could address those three pieces, I would appreciate it. Secretary Sebelius. In terms of the resources and tools, Congresswoman, we are working very closely with both Labor and with Treasury that has a sort of piece of some of these puzzles on the initial regulations. That has gone pretty well. We have put together our Office on Consumer Information and Insurance Oversight. It is going to be led by a former insurance commissioner who also has worked in many States around the country on regulatory oversight. We are working very, very closely with my former colleagues at the National Association of Insurance Commissioners because this has got to be, frankly, a State-led, on-the-ground program. They are the ones who have this ability and information. I think there is a very robust discussion. They are in the midst of identifying the terminology and definition for the medical loss ratio. We are looking at some laws that are in place and work very well and what the actuaries can actually take a look at. So it is something we are going to take very seriously. In terms of the rate review, the original Senate bill had a provision that Senator Feinstein was promulgating of a rate authority that would actually be the interim strategy between the time the bill passed this year and the time that the new exchanges were in place. That rate authority was not part of the reconciliation measure and I think would set up a framework where, absent State review authority, there would be a fallback review authority. So I think that debate is likely to go on and may be an important piece of this puzzle, because, right now, unless a State changes the laws and takes on this responsibility, there really is not fallback, other than highlighting what rating is under way. But there is no rating authority right now with the Department of Health and Human Services, and we are encouraging States to do just that. Ms. DeLauro. I am really pleased to hear that. As you know, I come from the State of Connecticut. We probably are the insurance capital of the country. Over and over again, as my other colleagues have experienced, the insurance companies, we have lived in their world a very long time. It is now time for them to live in our world. Thank you, Mr. Chairman. Mr. Obey. Mr. Moran. PREVENTION ISSUES Mr. Moran. Thank you very much, Mr. Chairman. Let me join the chorus of gratitude for your leadership, Madam Secretary. But it does seem as though you are paddling upstream against the current. When you look at your budget, about 85 percent of it is really not under your control. It is reimbursement after people have gotten sick, and it is to the elderly. Medicare and most of Medicaid is still nursing home care for seniors. But something dramatic is happening in the health care of this current generation of young people that bodes ill for the future costs of care. Asthma rates have tripled in this past generation. One in every six American children now has a developmental disorder--attention deficit disorder, mental retardation, dyslexia. One in every 59 boys is diagnosed with autism today. After accidents, cancer is the leading cause of death among children. Primary brain cancer has gone up about 50 percent. Childhood obesity has quadrupled in the last 10 years. Diabetes is out of control, about 25 million people now. In fact, they now say one in two minority children will develop diabetes during their lifetime. That is unbelievable. So it would seem that somehow we have got to get a handle on prevention. What is causing all this? Because it really is a dramatic change in the last generation. The First Lady's emphasis upon obesity, upon what people eat, is critically important. I would like to know how you are integrating that in terms of your program priorities. It also may have something to do with the chemicals in the air we breathe or the water we drink or the food we eat. In fact, there was an analysis of umbilical cord blood in 2007 and 2008 that showed that the average infant had 232 industrial compounds present in the umbilical cord blood. So many people think there may be an endocrine-disrupting effect on health care that is contributing to this massive increase in certain diseases. I ask you because you have responsibility for the National Institute of Environmental Health Sciences. I know they have some indication this may be what is behind these massive changes in childhood illnesses. I am wondering if you have any plans to enable them to take a more robust, aggressive approach in terms of the environment's effect as well as what you are doing in coordinating with the First Lady's initiative on obesity. Secretary Sebelius. Thank you, Congressman. The statistics you recite are alarming and, unfortunately, very real and ones that we have to take incredibly seriously. The shorthand is that we spend more, live sicker, and die younger than most developed countries; and there is something fundamentally wrong with that picture. The First Lady's initiative, as you know, is not only focused on what you eat. That is a piece of the puzzle. But I think it is a strategy that really looks across the areas and understands that the health of kids is impacted by what they eat in and outside their houses, what goes on in school, how much exercise they get, whether there is a safe place to play and walk, a whole host of strategies that I think provide a template for the kind of thing that you are talking about. I don't think there is any question that, first, reporting is better in this generation. Some of what you are talking about is probably highlighted by better monitoring, better reporting. But that doesn't nearly compensate for the incredible increases. Some of it is preventable in terms of what we are doing to ourselves, and some of it is likely to have environmental impact. My Assistant Secretary for Health, Dr. Koh, has reengaged our Department in a very robust fashion in working with the Environmental Protection Agency and others in looking at the health impact of environmental issues. HHS had kind of withdrawn from that space for a while, and we are very much back at the table. So whether it is looking at carbon content or water-based diseases or air quality, which has a huge impact on asthma, there are huge health impacts from environmental issues. And I would suggest also that the Food and Drug Administration is taking very seriously a whole host of investigations in terms of chemical content, which may well impact people not in terms what they are eating, but the kind of cans, the bottling, a whole host of other areas. So this is all something that I think we are reengaging in a very active way and share your alarm and what the current health profile is for this country. Mr. Moran. Thank you, Madam Secretary. Mr. Obey. Madam Secretary, I have a number of questions that I would like you to answer for the record, one on health professions workforce, another on pandemic flu, a third on LIHEAP, one on health-care associated infections, oral health, health information technology, and several others. HEALTH CARE REFORM Mr. Obey. But let me ask a couple of questions about the bill that we just passed. Mr. Tiahrt and I are friends, but we often disagree. We are not disagreeable friends, but we are disagreeing friends very often. But in light of his characterization of the health care bill as a government takeover, let me ask a few questions. Is the VA a government agency? Secretary Sebelius. Yes, sir. Mr. Obey. Is Medicare a government program? Secretary Sebelius. Yes, sir. Mr. Obey. Is Medicaid a government program? Secretary Sebelius. Yes. Mr. Obey. I thought so, too. Is this health care bill like Canada or Britain, or is it more based on a private-sector system? Secretary Sebelius. The system is based on building out a private-sector strategy with new health exchanges. Mr. Obey. Will the doctors under the system work for the government? Secretary Sebelius. Not unless they do right now. Some do for the VA, as you know, and for the Department of Defense. But, no. Mr. Obey. What about the nurses? Are we adding millions of nurses to the Federal payroll? Secretary Sebelius. No, sir. Mr. Obey. What are these things called insurance companies? Are they public entities or are they private? Secretary Sebelius. Private-sector companies. Mr. Obey. Are they usually profit-making private entities? Secretary Sebelius. From everything I can tell, yes, sir. Mr. Obey. I thought so, too. What does the health reform bill do for the fiscal solvency of the Medicare program? Secretary Sebelius. Well, the estimate that was made when the reconciliation bill was proposed was that it added a minimum of 10 years to the life of the Medicare trust fund. Mr. Obey. What does it do to change the payment system from one based on frequency of procedures to one based on quality of medical outcomes? Secretary Sebelius. Congressman, it sets a direction for Medicare to become, I would say, a quality-based purchaser as opposed to the current strategy of fee-for-service, which is more about content than about quality. Mr. Obey. I agree with all of that. Let me just tell you a story, because we have had such controversy and such points of disagreement about the details of this plan. Between 1930 and 1938, a fellow by the name of Gerry Boileau represented my congressional district. He was the last of the LaFollette Progressive Republicans. When Fiorello LaGuardia became mayor of New York, he succeeded LaGuardia as the spokesman for the Progressive Republicans in the House; and then he was beaten in 1938. My dad ran a supper club when I was much younger. Gerry came home and became a local judge. He came into our place one evening, and we started talking, and I finally asked him, Gerry, what beat you in 1938? He said, senior citizens. He said, I was strongly for Social Security and in my district the seniors were against it. I said, what on Earth are you talking about? How can seniors possibly be against Social Security? Not the seniors I know today. He said, in those days, it was different. He said, in those days, we had Social Security as one alternative, which is a contributory program. And then we had the Townsend plan, old Doc Townsend from California, who didn't want a contributory plan. He just wanted, I think, a hundred-dollar-a-month welfare payment to every senior. And he said, we all knew that couldn't survive very long because the country doesn't like welfare. So he said, I strongly supported Social Security. And old Doc Townsend came into my district and helped organize Townsend clubs; and he said, they beat me. The point of the story is this: We look today, shortly after the health reform bill is passed, and we see all of these little fights that we had--regional, ideological, philosophical--but I think 20 or 25 years from now we are going to look back at the bill and say, what on Earth was that fight all about? How on Earth could we ever have functioned without this program? I think all of these little fights that were so important to people as we were going through them, none of them are going to be remembered. What will be remembered is that we finally put this country in the rank of civilized societies that do not require people with very little money to beg in order to get health care. That, to me, is basically the lesson of Gerry Boileau's story. I mean, I lost a whole lot more fights than I won on the health reform bill. I favored public option. I have no objection to single payer. I, frankly, didn't care as long as we got two things, as long as we covered as many people as possible and as long as we changed the rules of the game so that little people weren't squeezed by corporate giants called insurance companies. That is basically all I wanted. Everything else is candy. I just want to thank you for the work that you did on this package and to thank everybody who voted for it and to thank those who opposed it and raised constructive questions along the way. Because, to me, regardless of all these little debates that we had, the obligation that all of us have now is to simply try to make it work and to think through whether there have to be adjustments down the line, make certain we have got plenty of oversight, and especially make certain we have got a huge expansion of our efforts to go after waste, fraud, and abuse. Because you have got lots of jerks in this society who will try to take advantage of this and rip off the taxpayer and rip off customers. If we believe in expanding these services, we just can't let that nonsense happen. Secretary Sebelius. Well, I appreciate that, Mr. Chairman. I spent Easter weekend with my father, who turned 89 on the 22nd of March. He served in the United States Congress on the Energy and Commerce Committee 45 years ago when Medicare was passed. He told me a number of stories about how ferocious that battle was, how ferociously a number of people opposed Medicare's passage, and how differently it looked then than it does now, where he is now a pleased beneficiary, and reminded me that over 45 years there have been changes, there have been a number of improvements, but the basic tenet that, once you turn 65 in this country, that you have health security, was a promise made then and a promise that we intend to keep now. It was interesting having his historic perspective on the beginning of this new chapter in American health security. Mr. Obey. Thank you. I am going to have to go over to the House for action on a bill that is going to be pending shortly. And so if I have to leave before the hearing is done, it is nothing you said. I just have to get over there. Secretary Sebelius. I am pleased to hear that. Mr. Obey. I will ask Ms. DeLauro to take over if we are not done. Meanwhile, I would like to run a second round for about 3 minutes apiece. Mr. Tiahrt. UNFUNDED PROGRAMS IN HEALTH REFORM Mr. Tiahrt. Thank you, Mr. Chairman. I want to remind you the hearing isn't done, so maybe there will be something come up that won't make you want to leave early. One of the things that concerns me greatly is about the cost of this. Because, quite frankly, we have overspent this year by more than $800 billion this fiscal year. We know that there are at least 80 programs that are in the bill that require discretionary appropriations, and we have about $110 billion for these 80 programs. There are also 36 programs, at least--three dozen programs--that are open-ended. I have asked the Congressional Budget Office to give us some estimate as to what they are going to cost. They don't sound like very cheap programs. Of the 36, community health insurance option, design and implementation of regional systems for emergency care, trauma care centers and service availability, oral health care prevention activity, programs relating to congenital hart disease, multi-State qualified health plans, community-based collaborative care networks, to name a few. So, in addition, it is my understanding the CBO has estimated that CMS and the IRS will need an additional $20 billion in order to set up the systems just to implement ObamaCare. So has your Department developed a cost estimate for all these new programs that are not in the President's budget, and when will you be sending an addendum to the President's budget for next year to cover these costs, and where will the money come from? Secretary Sebelius. Well, Congressman, you have our 2011 budget presentations; and there is not an intent to send an addendum to the budget. Mr. Tiahrt. How will you cover the cost of these programs that are not in the budget? It says in the law such sums as required. Where are such sums going to come from? Secretary Sebelius. Well, my understanding is, the way that process works, if there isn't authorization in the bill itself, this will be a discussion that you and your colleagues will have here in Congress. Mr. Tiahrt. So we are going to have to come up for the funding for these programs? Secretary Sebelius. If the priorities are to move ahead on those programs, I assume they will be funded. But you have our 2011 budget submission before you. Mr. Tiahrt. So the 302(a) allocation that we have and the 302(b) allocation for your Department right now doesn't have a request from the President for such sums as required on these 36 programs. Secretary Sebelius. That is correct. Mr. Tiahrt. So, Mr. Chairman, where are we going to get the money for these programs that we don't have any budget for and we won't have any allocation for? I guess he is involved in another conversation. My concern is that we don't have the funding for this and we have no idea how much it is going to cost and, again, we don't know where the money is coming from. China is not lending us money on long-term Treasury bills now. The Fed has loaned money to the United States. They already owe us--or we owe them $5.5 trillion as taxpayers. Where is the money going to come from? Secretary Sebelius. Congressman, again, I think that the programs are likely not to exist unless they are funded by Congress. That is not currently part of the authorized bill. I think the very good news for the American public is that, unlike the last major health initiative move forward, the prescription drug benefit, this bill is paid for. It is paid for over time. In fact, the Congressional Budget Office has estimated an $100 billion decrease in the deficit in the first 10 years and closer to a trillion dollars decrease over the next 10 years. This is fully paid for over the life of the program. Mr. Tiahrt. You can't count Medicare dollars twice. We are taking money out of Medicare and adding them to the program that you are going to administer. Where is the money for the $500 billion for Medicare? There are a lot of programs, Mr. Chairman, that don't have funding. They are not in the President's budget. We won't get the allocation for them. I am just wondering how we are going to fund them. Mr. Obey. First of all, the gentleman's time has expired. But let me simply answer the gentleman's question by saying there is a big difference between programs that are authorized and programs that are mandatory. These are not mandatory programs, to my understanding. Mr. Tiahrt. Are we not going to fund the community health insurance option, the oral health care prevention activities? Mr. Obey. Given the fact that we have a good $17 billion hole in the budget on Pell Grants, I have no idea what we are going to be funding on anything. Mr. Tiahrt. Thank you, Mr. Chairman. Mr. Obey. I don't think anybody else does, either. Who is next? Ms. Roybal-Allard. UNDERAGE DRINKING Ms. Roybal-Allard. Secretary Sebelius, Congresswoman DeLauro and I have been working together for over 10 years to reduce the dangerous incidence of underage drinking in this country, and we were very pleased that your administration recommended an increase to the STOP grants this year to enable more communities to address the critical problem. We have heard, however, that the HHS is looking to further expand its efforts in underage drinking prevention. The questions that I have are, first of all, CDC and NIH are recognized leaders in developing evidence-based strategies on underage drinking. So what are you doing to ensure that the rest of HHS uses their guidance and guidelines in implementing programs directed at preventing and reducing underage drinking? How will you ensure that the State public health agencies with their own rich experience in tobacco control and other public health insurance are fully engaged in collaboration with State substance abuse agencies? And what will be the roles and resources available to the various HHS agencies to ensure that all of this happens? Secretary Sebelius. Congresswoman, as you say, we do have a recommended budget increase for the STOP Act. I think that is a step of directing more resources. We also have a talented new leader in the agency as my Assistant Secretary of Substance Abuse and Mental Health Services, Pam Hyde, who not only has run State systems but has worked in the private sector and run medical systems and is very tuned into this issue and is very much at the table looking at collaborative strategies. So we have the Substance Abuse and Mental Health Services Administration at the table. We have our scientific-based evidence from CDC and the strategies that work on the ground, and we are working in collaboration with State and local partners to make sure what we know is effective actually is drilled down. So this is an effort. One of the things that the President made clear to all of his Cabinet officers is that he wants us to leverage our assets not only across departments but within our own agencies. So we have a number of cross-agency collaborations, and this is one of them. SECTION 317 VACCINATION PROGRAM Ms. Roybal-Allard. That is great to hear. In fact, you mentioned in an earlier statement, the 317 vaccination program. This program historically has been used for vaccinating children. However, each year, hundreds of thousands of American adults are hospitalized and tens of thousands die from diseases that could have been prevented through vaccination. It is estimated that the cost of the health burden to society from vaccination-preventable diseases is approximately $10 billion annually. How will HHS use existing funding streams to address the issue of increasing adolescent and adult vaccinations, and has the Department considered developing an adult immunization strategy? And, in particular, what could be done to increase vaccination rates among health care workers? Mr. Obey. If we could have a fairly short response, please. Secretary Sebelius. We are working on this. I was just at the 44th annual vaccination week-long conference. We learned a lot of lessons from H1N1 that we intend to apply across the board, and one of them is how to deal more effectively with not only minority communities but with health care workers. Ms. Roybal-Allard. Hopefully, we can follow up on this. Mr. Obey. Mr. Cole. Mr. Cole. Thank you, Mr. Chairman. I was listening to that wonderful story about Gerry Boileau. And I must say, the moral I drew was that progressive Republicans always get beat by liberal Democrats that say they love them. So it is kind of a warning story there for me. On a more serious note, I share Mr. Tiarht's---- Mr. Obey. But he got beat by another Republican. PROJECTED COVERAGE RATES Mr. Cole [continuing]. I share Mr. Tiahrt's concern about some of the financial bases of the bill, the one he particularly highlighted about the transfer of Medicare funds out for, really, a new entitlement program at a point when we have a baby-boom generation hitting Medicare age. I just don't think it is going to hold. Let me ask you about another part of it that concerns me greatly, Madam Secretary. Right now we assume that there is-- and I think you said the majority of people moving into the system would be insured by private insurance. I am not 100 percent sure that is accurate, because the numbers I saw suggested about half were going to be, actually, Medicaid patients. So, at best, it is pretty close as to whether they are going to be purchasing insurance. And, as I understand the bill, frankly, those younger people are going to have an option--well, it is, quote, ``mandatory.'' They can pay a penalty as opposed to just buy insurance. The penalty that I have seen is cheaper than the insurance. And I would suggest a lot of them are going to do what most people in their 20s and early 30s do, and that is take the cheaper road out. Whether that is wise or not is debatable, but I think that is true. So how confident are you that the new people showing up to be insured, given the fact that many of them are Medicaid and given the fact that many of them have a way out when they are young and healthy, are actually going to provide the revenue stream that the bill envisions? Secretary Sebelius. Well, Congressman, the experience in Massachusetts, which is one that we looked to--and there are other States who have--Wisconsin, again, has a pretty near- universal insurance avenue. But in Massachusetts, a fairly similar structure--an individual mandate with a relatively low penalty for failing to buy insurance, plus a hardship waiver-- has produced 97, 98 percent insurance coverage. The experience that they have found is that people really wanted insurance; they just felt that there were too many financial barriers or health barriers, frankly, to get into the marketplace. So, at least in the instance that that fairly similar structure has been tried, there actually was a very robust take-up in spite of some skeptics who thought that people would opt out if they were younger and healthier. PHYSICIAN-OWNED HOSPITALS Mr. Cole. Let me ask you--my time is about to run out, and it is a totally unrelated question. But one of the provisions of the bill that really concerned me, the treatment of physician-owned hospitals--and I realize there is a philosophical divergence in Congress over that particular issue. In my State, they are some of the highest-performing hospitals that we have. By every rating they provide excellent care, and we have been very pleased with them. What is the general attitude of the administration toward physician-owned hospitals, looking forward? Secretary Sebelius. I can honestly tell you I haven't ever been involved in a, sort of, philosophical discussion. There isn't any directional discussion. I think it has more come from Congress, frankly, and the alarm in certain areas of the country of the proliferation to what some have seen as the disadvantage of community hospitals trying to run emergency rooms and contributing to graduate medical education and then being cherry-picked by provider-based hospitals. But I don't think the Department, itself, has a directional strategy. It really is looking at high-quality, cost-effective health-care delivery. And, as you say, some are in physician- owned hospitals and others are sometimes in community hospitals. But that is really our goal. Mr. Cole. I would just say in closing on that, just so you know, in our State most of the physician-owned hospitals operate emergency rooms, they take Medicare patients. So they really stack up pretty favorably. And I would just commend you to consider that as one of the models, going forward. I am glad to hear that there is not an administration position per se. Thank you. Mr. Obey. Mr. Honda. CHILDREN'S HEALTH TASK FORCE Mr. Honda. Thank you, Mr. Chairman. The health reform issues are also going to be including our concerns of children's health issues. And children probably compromise 50 percent of our Medicaid rolls. Will there be any thought about establishing a children's health task force? And leading up to that, my county of Santa Clara County recently has had the third-highest rate of TB in California, and it has really grown from almost an elimination of TB in our county to being third in the State of California. Given that rise and given the work that you are going to be required to do, as far as travelling and everything else like that, I was just concerned that you had sufficient resources to be able to do the kind of travel and create the kind of presence that is going to be expected when you are going around the country to make the negotiations and be an advocate for this program. Those two questions, if I could have a quick response. Secretary Sebelius. Congressman, I think in terms of the travel and presence responsibility, cloning would come in very handy in this instance, because I do think there is a lot of confusion and concern and also a lot of eagerness about people wanting to know about the bill, how it is going to work, how it is going to be implemented. And I can assure you, I am going to do my best, as are lots of members of our department, to be out and about everywhere. The Children's Health Insurance Program, which you all extended in 2009 prior to the passage of the Affordable Care Act, I think is a great focus on making sure that children have appropriate intensive care, particularly at the youngest ages. And we are undergoing a very aggressive outreach effort in conjunction with faith-based and neighborhood groups, with health-care providers, with State and local partners, to identify and enroll the approximately 5,000,000 children who are eligible but currently not enrolled. It continues to be a challenge. The good news is, even last year in very difficult budget times, States and local governments signed up an additional 2,500,000 American children. We would like to see that continue to rise. And I think that, as you know, the SCHIP program continues during the life of the Affordable Care Act. And I think that is going to focus that kind of attention and services on the children's population and one that we take very seriously. Mr. Obey. Mr. Ryan. FORUM HEALTH BANKRUPTCY Mr. Ryan. Thank you, Mr. Chairman. Madam Secretary, you know Ohio well. I represent a district in Youngstown and Akron. And in the city of Youngstown, we have two health-care systems. One of them is Forum Health, which employs approximately 4,000 people in the region, and it is now trying to emerge from bankruptcy. Youngstown has about a 15 or 16 percent unemployment rate. The city of Warren has one very similar. In adding 30,000,000 new people to the system and many in Ohio and western PA, I don't think now is a good time to see a hospital close down. And I was wondering if there is anything in your sights or from the administration that could help address this issue. Secretary Sebelius. Well, my understanding is we solved one of the problems, in terms of a payment stream that will continue during the discussion, which I think is important. And, again, I think that the framework of having a payment system under the individuals who will seek hospital care in the future is a big step forward. And hospitals have really struggled. I also think that there were huge improvements made in the bill over the course of the discussion dealing with disproportionate share allocation, where originally there was a thought that it could disappear entirely, and I think that was recalculated appropriately based on the fact that there are huge disparities in terms of the patient load that is likely to hit various hospitals. But I think you are absolutely right that we need a robust health-care delivery system. And it is something that we are going to be working with local communities, looking at ways we can provide resources in this kind of bridge strategy to make sure they continue to provide services. Mr. Ryan. Well, in the meantime, until 2014 when everyone comes in, I mean, hospitals like this could potentially close down. And I think in the Department of Agriculture there are some loan guarantees. And maybe we can come up with some ways to help these hospitals refinance. Because, you know, between now and then, a lot could happen, and the other hospital in town can't handle the influx that they could potentially receive. Secretary Sebelius. With the Community Development Block Grant money, I think which is in HUD, and some other funding streams, I think we have to be more creative about bringing other agencies in. HHS really doesn't have either operational money or construction money, with regard to hospitals. But I think having that dialogue with my Cabinet colleagues is something that I am going to pursue, because it has come up in a number of areas, and it is a very critical piece of the health-care system. I think just like closing a school in a small town, you can't close a hospital, or people won't stay in the community. Mr. Ryan. Right. So I look forward to working with you on that, because it is urban development, it is health, it is education, it is everything. So I appreciate that. Mr. Obey. Ms. DeLauro. FOOD SAFETY Ms. DeLauro. Thank you, Mr. Chairman. Madam Secretary, let me just ask a food safety question of you. The volume of FDA-regulated imports has increased substantially over the past decade. The statistics say that FDA recorded 8,200,000 imported food lines in 2007; fewer than 2,800,000 entry lines a decade earlier. You have just over 1 percent of these lines that were physically examined and/or tested. It is often reported that, even with increased funding that the Congress has provided to the agency in these past 3 fiscal years, the FDA will still inspect less than 2 percent of import lines in 2011. This is mainly because the FDA relies on a very weak border inspection system. I also might add that there are indications that there potentially will be more inspectors but we could have fewer inspections. Again, can you tell us how do you think the FDA can improve in this area? There is the FDA food safety bill pending before the Congress in the Senate. How can that help to change this equation? And how do we deal with improving the inspection ratios in the next 5 years? Secretary Sebelius. Well, Congresswoman, first of all, thank you for your long-time leadership and expertise and interest in this area. And it is one that has changed dramatically over time. We no longer have an American-based food system, and I think that the regulatory framework is 20th- century at best and the system is global and increasingly global. Half our fruits and vegetables come from outside our borders; about two-thirds of the seafood comes from outside our borders, just to name a couple of products. No question that the new framework passed by the House and pending in the Senate is a huge step forward and has a lot of the expertise of this committee's stamp on it--not this committee, but your expertise as part of moving that ahead. I do think that part of the strategy also is the FDA establishing a much more robust footprint in other parts of the world. So there are now four new offices in China, there are offices in Mexico, there are offices elsewhere, to not wait until products actually come across the borders, but look at the origins of those products. Secondly, I think it is critical that we have a much more robust and a different relationship with the private sector. The food industry often takes the hit. At a time of a recall, they have enormous financial risk, but have been, I think, not as engaged and involved in self-reporting, identification, quick recalls. The FDA needs some additional subpoena power and automated recall power, but also engagement of the industry at a much earlier stage, which, again, is part of the framework moving forward. Ms. DeLauro. Mr. Chairman, just one final comment. I just would say this to you, Madam Secretary. For years and years and years, the whole issue has been that trade in this area of food safety has trumped public health. I will be vigilant--I am hopeful, but vigilant that that will continue not to occur, that trade will get in the way of what we can do with regard to the public health as it regards food safety. Thank you. Thank you, Mr. Chairman. Mr. Obey. Thank you. Madam Secretary, thank you for being here. We kept you a few minutes over, but not much. Good luck to you. Secretary Sebelius. I appreciate it. Thank you so much. 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FY 2011 BUDGET OVERVIEW: NATIONAL INSTITUTES OF HEALTH WITNESSES FRANCIS S. COLLINS, M.D., PH.D., DIRECTOR, NATIONAL INSTITUTES OF HEALTH ANTHONY S. FAUCI, M.D., DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES THOMAS R. INSEL, M.D., DIRECTOR, NATIONAL INSTITUTE OF MENTAL HEALTH GRIFFIN P. RODGERS, M.D., DIRECTOR, NATIONAL INSTITUTE OF DIABETES AND DIGESTIVE AND KIDNEY DISEASES Chairman Obey Opening Statement Mr. Obey. Good morning, everybody. Today we will hear from a variety of witnesses on the President's request for the National Institutes of Health. We will have as a principal witness Dr. Francis Collins, who has been here many times in his former role as the Director of the National Human Genome Research Institute at the National Institutes of Health (NIH). This is his first appearance before the Subcommittee in his new capacity as the Director of NIH. Accompanying Dr. Collins is Dr. Tony Fauci, Director of the National Institute of Allergy and Infectious Diseases; Dr. Tom Insel, Director of the National Institute of Mental Health; and Dr. Griffin Rodgers, Director of the National Institute of Diabetes and Digestive and Kidney Diseases. I think it is fair to say that supporting the work of NIH has been a priority of this Subcommittee, certainly for as long as I have been in the Congress, and I am pleased that the President has, in the context of a tight budget situation, still provided a request for a $1,000,000,000 increase proposed for NIH overall. Depending upon how you measure it, NIH has either had a meaningful increase in spending over the past 30 years or it has had a spectacular increase in funding. NIH was spending $1,800,000,000 when I joined the Subcommittee in 1973. The current fiscal year budget provided NIH with $31,000,000,000, so that is 16 times what it was spending when I joined the Committee, which sounds awfully big except that it is not adjusted for inflation. When you adjust it for inflation, we have not quite doubled in real dollar terms funding for NIH over that period. We have had, I think it is fair to say, a mixed bag with respect to success against various diseases. With some, childhood leukemia, we have had significant gains. We certainly have had gains in holding at bay, somewhat, AIDS in comparison to what we feared when the Subcommittee first started talking about it. And yet there are other areas where very little progress has been made; example, pancreatic cancer, esophageal cancer, and a variety of other maladies. So today we want to hear from these witnesses about not only what they intend to do with their money, but what their observations are in terms of how we can develop a better track record in the future in attacking diseases that have not been the subject of much progress over the past two decades. And I have to say one thing before I ask Mr. Tiahrt for his comments. I have always been rather disappointed that, in my many conversations with people in the medical field, with providers in the field, that the discussion, when it turns to health care, so often is focused simply on issues such as reimbursement rates, what are hospitals going to get by way of compensation, what are doctors going to get paid. And that is all very legitimate, but I have personally been struck by the lack of comment or curiosity or, for that matter, the lack of visible political support for added medical research which, after all, lays the foundation for the product that the practitioners in the health care area have to offer their patients and their customers. So I think while there are many activists who have, for years, been pushing for additional funding for National Institutes of Health, I think in some ways I have been disappointed by the lack of aggressive activism on the part of so many professionals in the field. And I am not quite sure what to do about that, but I know since Dr. Collins is a very smart fellow, he will have an answer to that and everything else. The other thing I want to say, Doctor, I want to express my personal appreciation for the fact I think you have, by your public statements, made it quite clear that one does not have to believe--I am saying it backwards. You have made it quite clear that there is not necessarily any inconsistency between pursuit of science and the belief in religion. To me, I have never understood why people think that the two are at loggerheads; that has never been my conclusion either intellectually or emotionally. So I appreciate the role that you have played in driving that point home as well. With that, let me simply turn to Mr. Tiahrt to see what comments he might have. Mr. Tiahrt. Thank you, Mr. Chairman. It is always a mystery, what I am going to say, is it not? I am very pleased to see you gentlemen here today. Thank you for coming; appreciate your time. Dr. Collins, I am enjoying the Language of Life. The first chapter caught my attention when you say we are not in Kansas anymore. Being from Kansas, you do not know how many times I have thought that here in the District of Columbia. I think you do present genetics at a level that can be understood, and I think that is very important for our culture today. But certainly DNA research is proceeding at a very fast pace, and one of the concerns that I have is what we call the valley of death, the gap between our basic research and clinical development. We seem to have this void in the middle where we cannot get it into action sometimes, and you are coming across very critical research, and we want to find mechanisms to get it into the clinic and get it into applying; I guess because I feel like basic research will not do us any good unless we get it in a practical application for those of us out here. And that is why we make the investment, so that we can get it into the clinics and into the cures. I am pleased to see that there are initiatives that are relatively new in your budget request, particularly the Therapeutics for Rare and Neglected Diseases, or TRND. I think that is exactly the type of effort we need to focus NIH's resources so that we can get across this valley of death and start funding cures. So I look forward to your testimony and I have some questions once we get through it. Thank you, Mr. Chairman. Mr. Obey. Mr. Lewis. Mr. Lewis. Thank you very much, Mr. Chairman. I will wait to ask questions after we have heard from the witnesses. I appreciate being recognized. Mr. Obey. All right. Dr. Collins, please proceed. Take as much time as you want, within reason. [Laughter.] Dr. Collins Opening Statement Dr. Collins. Well, thank you, and good morning, Mr. Chairman and distinguished members of this Subcommittee. It is a great honor to appear before you for the first time in my role as the Director of the NIH and to present the fiscal year 2011 budget, but especially to discuss my vision for the future of biomedical research. I would like for my written testimony to be included in the record. I am going to deviate from it quite a bit in my remarks this morning. So I would like to thank each of you for your steadfast support of NIH's mission, which, as you can see--and I am going to show a few visuals on these screens--is a dual one: to support the discovery of fundamental knowledge about the nature and behavior of living systems, but to be sure that we are then applying that to extend healthy life and reduce the burdens of disability and premature illness and death. I want to thank the Committee for the support in fiscal year 2010 of $31 billion, as well as the $10.4 billion that was provided through the American Recovery and Reinvestment Act. And I have been very grateful, over 15 years leading the Human Genome Project, for the support of this Committee. As you know, that project finished ahead of schedule and under budget, and was supported strongly by this Congress and by this Committee even at times when there were controversies about it. But now, as steward of the entire portfolio of NIH, I believe that opportunities to turn discovery into health have never been greater. I am honored to have with me this morning three distinguished leaders from NIH that the Chairman has already introduced, Dr. Rodgers, Dr. Insel, and Dr. Fauci, and I am sure they will be happy to also engage you in the questions. But I also want to introduce you to some other folks today, just a few of the millions of Americans who have been helped by NIH-funded research. And let us begin with Kate Robbins. So let us hear from Kate. [Video shown.] Kate Robbins. The message I got is make your plans, get your life in order, and enjoy the next few months; and I was enraged. [End of videotape.] Dr. Collins. So eight years ago, at the age of 44, this non-smoking mother of two was diagnosed with lung cancer and given a diagnosis essentially of terminal disease. She had non- small cell lung cancer that had already metastasized to her brain. And it continued to spread, after surgery, radiation, and chemotherapy, to her liver, her pancreas. But she enrolled in a clinical trial of a new drug called Iressa, or gefitinib, which is a new genome-based drug for cancer. And after Kate started the drug, dramatic things happened: most of her metastases vanished. As you can see in these CT scans of her liver before and after Iressa--this is before, six months later, and then today, seven and a half years later, those metastases shrank and disappeared and have not returned. There is no sign of cancer in her liver, her lungs, her pancreas. Her brain metastases are small and manageable; and, as you saw in the video, she is doing extremely well. So why does not Iressa work in all cases? Well, we understand that. The response depends on whether or not the tumor has a specific mutation in a gene called EGFR. And we now understand that, which demonstrates the potential of personalized medicine. This drug is a god-send for that subset of individuals with those mutations, but it is unlikely to work if that mutation is not present. We need a lot more stories like Kate's, so NIH-funded researchers are now busy with projects like the Cancer Genome Atlas, mapping genomic changes in many types of cancer, including, Mr. Chairman, pancreatic cancer, which I agree is one where we desperately need new solutions. Next, I would like you to meet nine-year-old Corey Haas; his parents, Nancy and Ethan, shown up here in this photo. Corey was born with a disease which has quite a mouthful, Leber's congenital amaurosis, and it is a cause of blindness; it gradually robs young people of their sight. It is caused by mutations in a gene called RPE65. Now, by age seven Corey was legally blind; he needed a cane to get around, had to use a special computer screen. But that all changed in 2008, when Corey enrolled in a gene therapy trial at the University of Pennsylvania, which involved injecting normal copies of this RPE65 gene into his left eye. Researchers shot this video, then, of Corey navigating an obstacle course, and let me explain here. I am going to show you a video that is in the lower left here. Basically, Corey is being asked to walk a maze pattern. There are arrows painted in the floor. In this image they have covered up his treated eye, so he is only able to navigate based upon the untreated eye; and you will see that he is very, very limited in his eyesight. [Video shown.] Unidentified Speaker. You do not see any lines on the floor that tell you which direction? Corey Haas. No. No, I do not. Unidentified Speaker. Do you want a clue? Corey Haas. I cannot even see anything. Unidentified Speaker. Okay. [Video paused.] Dr. Collins. Now see what happens when they repeated the trial, same day, but now covering up his untreated eye and allowing him to use the eye that has received the gene therapy to find his way around. [Video resumed.] Unidentified Speaker. Okay, perfect. All right. And you can start whenever you are ready. Wow. Wow. [Applause.] [End of videotape.] Dr. Collins. Pretty amazing, though Corey is probably even more amazed he can ride a bike now and read the chalkboard like any other kid. Now finally meet Leslie Cook, a wonderful example of prevention-oriented research. Leslie smoked for 25 years, half of her life, a habit that put her at increased risk for heart attack, cancer, and many other diseases. [Video shown.] Leslie Cook. I felt as though the drug nicotine was actually controlling me, I was not controlling it, and I just wanted control over my life again. [End of videotape.] Dr. Collins. So this high-powered real estate lawyer tried to kick the habit many times; she used the gum, the patch. You name it, she had tried it. Nothing worked. And then in 2006 she enrolled in a phase 2 clinical trial of an anti-nicotine vaccine called NicVAX. This vaccine actually stimulates the immune system to produce antibodies against nicotine. Those antibodies bind to the nicotine and keep it from entering the brain, therefore reducing the pleasure associated with smoking. NicVAX apparently did the trick for Leslie; she has not smoked in three and a half years. Now, hopefully her experience will soon be repeated on a much larger scale. A clinical trial of NicVAX involving about 1,000 smokers was recently launched. About $10 million in NIH Recovery Act funds are being used to support that effort, which is rooted in research-funded at NIH, and it is the first ever phase 3 trial of a smoking cessation vaccine. So I would like to thank Leslie, Corey, and Kate for allowing me to share their stories. I think their experiences show that science is not a 100-yard dash, it is a marathon. Each of those built upon years of research getting to that clinical advance. But thanks to discoveries you have funded through NIH appropriations, we have covered a lot of ground in this marathon. Let me tell you how NIH plans to meet that continuing challenge, because there is still a ways to go. So one of my first actions upon being named NIH Director was to scan the landscape of biomedical research for areas that were ripe for major advances that could yield substantial benefits downstream, because this is a unique time. While the list of specific projects could go on forever, I have identified five areas of exceptional opportunity I want to very briefly tell you about, and they are in a paper that you have at your place published in Science Magazine on January 1st. The first of those opportunities is to use the high throughput technologies that have recently been invented to understand fundamental biology and how disease occurs. This includes genomics, nanotechnology, imaging approaches, computational biology, and a host of other new technologies that are truly powerful to understand the causes and the means to treat or prevent cancer, autism, infectious diseases, and a long list. A second opportunity--and this ties very much into what Mr. Tiahrt was asking about--is the effort to take these basic science discoveries that are pouring out of research laboratories and accelerate the translation of this into new and better treatments. This is not an easy process, as the picture shows you; there can be a difficult passageway between basic research and drugs. We need to build a bridge--by the way, that is San Francisco, in case the first picture was not so clear--and we are doing that with programs like TRND, which stands for Therapeutics for Rare and Neglected Diseases. And in the health care reform bill the cures Acceleration Network, which is a new provision that would give NIH additional flexibility to push this translational agenda even more robustly and in a more innovative way. And this includes cell therapy as well, the effort to use stem cells for therapeutics. If you noticed in this morning's Washington Post, we have now approved another set of stem cell lines, bringing the total to 64 that are available for use by federally funded researchers. The third opportunity here, shown by these various banners representing programs that NIH has supported particularly to try to get information out there about the public health, is to put science to work for the benefit of health care. We, after all, need evidence to support the transformation of the practice of medicine that we all agree is necessary. Some of that is comparative effectiveness research, personalized medicine, the study and the attempt to solve health disparities, the efforts to focus on behavioral medicine; and even on health care economics, to understand what are the factors that play into better outcomes at lower cost. The fourth area, global health. Clearly we have a great opportunity now because science has moved forward rapidly in uncovering the nature of many pathogens that we previously did not understand that affect hundreds of millions of people in the developing world. We have the chance to push that agenda forward, building upon what NIH has done already in the past and focusing now not only on infectious diseases, but also on noncommunicable diseases like depression, which also become, in the developing world, major public health problems. It is the noncommunicable diseases that represent the most rapidly growing area of morbidity and mortality. And, finally, and fifth, we need to reinvigorate and empower our biomedical research community, our most important resource. That means we need to focus on innovation, making sure that we are giving ideas that are a little wacky and out of the box a chance to get supported. We need to be sure that we are supporting early-stage investigators, giving them the confidence that there is a place for them in our research community, even at times when budgets are tight. And we need to focus on training the next generation, and particularly reaching out to diverse communities that are not adequately represented right now in our workforce. Those are the five themes that I have focused on. You also have at your place a new document that has just come out from NIH that talks more about these, and also the many advances that have occurred because of NIH research over the last few years. So, to summarize, if our Nation is bold enough to act today upon these unprecedented opportunities in medical research, I think we will be amazed at what tomorrow can bring. In the world I envision just a few decades from now, the one-size- fits-all approach to medicine will be a thing of the past. We will use genetic information to personalize our health care. We will use stem cells to repair spinal cord injuries; bioengineered bones and cartilage to replace worn out joints; nanotechnology to deliver therapies with exquisite precision. We will preempt heart disease with minimally-invasive image- guided procedures and use an artificial pancreas or other new technologies to manage diabetes better. As for infectious diseases, I look forward to having a universal vaccine with the power to protect against both seasonal and pandemic flu. I also hope, and that hope is based upon progress, for an AIDS vaccine and a malaria vaccine, which together would save millions of lives around the globe every year. And I dream of a day where, in ways yet to be discovered, we will be able to prevent Alzheimer's disease, Parkinson's disease, and many others that rob us much too soon of family and friends. Just imagine what that future could mean for our Nation, our economy, for all humankind. This is what keeps NIH in the research marathon and why we are asking you to go the distance with us. The fiscal year 2011 request for NIH from this Committee is $32 billion, an increase of $1 billion, or 3.2 percent above the fiscal year 2010 level. Those funds will enable the nationwide biomedical research community to pursue a whole number of substantial opportunities for major scientific and health advances. So thank you, Mr. Chairman and members of the Subcommittee. I would be pleased to respond to any questions you may have. [Written statement by Francis S. Collins, MD, PhD, follows:] [GRAPHIC] [TIFF OMITTED] T8233B.095 [GRAPHIC] [TIFF OMITTED] T8233B.096 [GRAPHIC] [TIFF OMITTED] T8233B.097 [GRAPHIC] [TIFF OMITTED] T8233B.098 [GRAPHIC] [TIFF OMITTED] T8233B.099 [GRAPHIC] [TIFF OMITTED] T8233B.100 [GRAPHIC] [TIFF OMITTED] T8233B.101 [GRAPHIC] [TIFF OMITTED] T8233B.102 [GRAPHIC] [TIFF OMITTED] T8233B.103 [GRAPHIC] [TIFF OMITTED] T8233B.104 [GRAPHIC] [TIFF OMITTED] T8233B.105 [GRAPHIC] [TIFF OMITTED] T8233B.106 [GRAPHIC] [TIFF OMITTED] T8233B.107 [GRAPHIC] [TIFF OMITTED] T8233B.108 [GRAPHIC] [TIFF OMITTED] T8233B.109 [GRAPHIC] [TIFF OMITTED] T8233B.110 [GRAPHIC] [TIFF OMITTED] T8233B.111 [GRAPHIC] [TIFF OMITTED] T8233B.112 [GRAPHIC] [TIFF OMITTED] T8233B.113 [GRAPHIC] [TIFF OMITTED] T8233B.114 [GRAPHIC] [TIFF OMITTED] T8233B.115 [GRAPHIC] [TIFF OMITTED] T8233B.116 [GRAPHIC] [TIFF OMITTED] T8233B.117 Mr. Obey. Thank you. Mr. Tiahrt. COMPARATIVE EFFECTIVENESS RESEARCH Mr. Tiahrt. Thank you, Mr. Chairman. Just reading on personalized medicine in this new publication here. I think one of the concerns I have had with the comparative effectiveness money that we have invested is that the good side of comparative effectiveness is we see what works and we communicate it well to physicians and clinics and hospitals and treatment centers. The part that concerns me is that when we start placing a dollar value on comparative effectiveness, that at some point we start making decisions based on costs that start rationing some care, rationing some treatments. And I think, during this health care debate that we have had over this past year and a half, that that has been part of the topic. Can you kind of give me some confidence that what we are doing at NIH now through comparative effectiveness research is not going to lead to rationing in the future. Dr. Collins. So, Mr. Tiahrt, I understand the concern. I think when we look at the kinds of research that NIH has done in the past and are planning to do now, the goal really is here to identify interventions that may be more effective and others that are less so, because evidence has to be valuable in making decisions about how we are going to put together a health care system that actually works. I might even ask my colleague, Dr. Rodgers, to tell you briefly about the Diabetes Prevention Program, the DPP, as an example of a comparative effectiveness research study that taught us something really important about how to prevent diabetes and which is now being implemented across the Country in a new and exciting way by United Healthcare. So, Griff, do you want to say a word about the DPP? Dr. Rodgers. Be very happy to. The Diabetes Prevention Program was a landmark study that was started over 10 years ago involving the NIH, the Centers for Disease Control and Prevention (CDC), and multiple institutes within the NIH, to identify those patients who are at high risk of developing diabetes. In this country, at the moment, there are about 24 million Americans who suffer with diabetes, but there are 57 million Americans who are at high risk of developing diabetes based upon family history, racial and ethnic groups, the fact that they may be overweight or obese. And clearly we are understanding now that a lot of this has to do with the susceptibility genes for diabetes. This intervention, which was a comparative effectiveness study, involved patients being treated with just general instructions, a so-called placebo group; a second group with a standard therapy for diabetes, Metformin; and a third group with an intensive lifestyle modification. In these over 3,000 patients that were studied, there was about a 58 percent reduction in the risk of patients who are at high risk for developing diabetes who underwent this intensive lifestyle modification over the period of time. That study was published in 2002, but just last year a follow-up study to that DPP, called the Outcome Study, was published which shows that there is an ongoing effect, even as long as 10 years. Patients who were randomized in this intensive lifestyle still maintain the ability to prevent or delay the onset of diabetes. Now, in a clinical research study, of course, we required one-on-one counseling with these individuals, but it was clear that in order for this to be effective, we had to figure out a way to make it more reasonable and cost-effective. So we turned to the YMCA to do a translational study to determine whether-- because, of course, YMCAs exist in all communities. We have estimated that most individuals in the U.S. live within a five- mile radius of the YMCA, and we wondered whether, rather than doing this on a one-on-one basis, if we do it in a group basis, whether we can cut the cost. In fact, we did. The cost for implementing this intensive lifestyle was reduced from the thousands down to $300 with the same effect. Mr. Tiahrt. Is that the dues at the YMCA? Dr. Rodgers. I am sorry? Yes. That is right. I have to say that this study was so effective, our colleagues at CDC got involved, expanded beyond the Indiana center that we initially funded, and just two weeks ago United Healthcare have, for the first time, decided to provide coverage for the use of this intervention at Ys and similar places to all of its members. Initially in six cities around the Country, but in fiscal year 2011 they plan to roll this out nationwide. Mr. Tiahrt. That is good, because diabetes is one of the leading causes for many things--amputation, blindness, heart disease. Dr. Rodgers. Absolutely. ADULT AND EMBRYONIC STEM CELLS Mr. Tiahrt. One last question here, because my time is short. There are basically two kinds of stem cells--there is the adult and the embryonic--and you have come up with a third from skin cells that you can engineer. Can you tell me what the results have been as far as research? Which category has yielded the most results as far as getting cures available for people? Dr. Collins. Well, we are very interested in the research on stem cells and, of course, that is a very much discussed topic. Adult stem cells, as they are called, have been around longer and certainly bone marrow transplants, for instance, depend upon the idea that there are stem cells in the bone marrow that can expand and repopulate when needed. So we have the greatest clinical experience because that kind of study has been around for quite a while. Human embryonic stem cells have only been around for about 10 years, and because of the concerns about safety and also some limitations in terms of who had the authority to work with those cells, we are not yet in a position of really knowing what their therapeutic potential might be, although many people are quite excited about that potential based on animal studies. There is so far only one Food and Drug Administration (FDA) approved trial for human embryonic stem cells, and that is for spinal cord injury, and it is too soon, by far, to know how that is going to turn out. The most recent type, as you mentioned, derive from skin cells, the so called induced pluripotent stem cells, or iPS cells, are even much newer on the scene. Only about three years ago Shinya Yamanaka came up with this amazing observation that with just four genes you could take a skin cell and convince it to be pluripotent. The potential here is enormous, because that would mean these cells came from the individual, so they could potentially be used therapeutically without rejection by the immune system. But there are many concerns about safety, because pluripotent cells are also capable of growing when you do not want them to, and can even cause tumors. So we have to work that safety issue out very carefully before even beginning to propose a clinical trial. But I think there is a lot of excitement about getting there. I have just recently initiated an Intramural iPS Cell Center at NIH to try to accelerate our study of these cells and the way in which they could be used in therapeutics. Mr. Tiahrt. Thank you. Thank you, Mr. Chairman. Mr. Obey. Ms. Lee. SICKLE CELL Ms. Lee. Thank you very much, Mr. Chairman. Let me first thank you all for being here again and just say how important we all recognize and know that your work is at NIH. Following up on the issue that we have discussed, I think most of you were here on the A1C diabetes public awareness campaign. I wanted to see, Dr. Rodgers, if you had any kind of results, feedback from what took place. Just a bit of background. We learned--and I learned and we brought it to this Committee--and thank you for following up on this--that people who have the sickle cell trait, oftentimes the A1C test for diabetes gives or could give a false result, a false positive, false negative. So we developed a public awareness campaign to let physicians, labs, and what have you, and community clinics know that there are other tests. So I just want to see how that public awareness campaign developed, what were the results, and also could you clarify the whole issue around sickle cell testing? Is sickle cell testing required at birth? I know it is no longer required when people apply for a marriage license, for what that is worth. So how do we make sure that people are aware that they have the trait or, well, the disease or prone or susceptible to the disease? Dr. Rodgers. Thank you. Let me answer your second question first, and that is related to is it required to test for sickle cell disease. These are really done on a State-by-State basis, and it is my understanding that most States do now test at birth for the presence of the sickle cell protein. It can be done very easily, using blood samples to detect either sickle cell trait or sickle cell disease. When there are problems, the infant is called back and confirmatory tests are done. It is my understanding that most States currently do testing, but I would have to---- [The information follows:] Sickle Cell Testing Sickle cell (SC) disease testing is now universally required. Because of the testing used, ``carrier status'' is determined. While all states do report our carrier status to the responsible physician, where it goes from there (if anywhere) is highly variable, depending upon state and physician practice. In reality, it is likely a relatively small proportion of parents who are actually informed if their child is an SC carrier. Ms. Lee. And how are adults reminded of that test result when they become adults? How do they know that? How does that follow the adult in terms of their medical records? Dr. Rodgers. Right. Well, that is something that is certainly, with electronic health records and the ability to follow that as patients move from doctor to doctor and clinic to clinic would be very important. I would have to get information on how that is followed comprehensively. I am sort of aware of this from a limited number of experiences that I have, and I can certainly provide that information to you with our sister organization, the National Heart, Lung, and Blood Institute. [The information follows:] Sickle Cell Results There is at present no system in place that ensures the orderly transition of health care information for an individual throughout his or her lifespan. Individuals diagnosed with sickle cell disease would ordinarily be aware of their diagnosis and in late adolescence the ongoing care of the child would be transferred from a pediatrician to either an internist or adult hematologist. The maintenance of information on being a carrier of sickle cell disease is a responsibility shared by an individual, his or her family members, and the team of health care providers. But back to your first question, and that relates to hemoglobin A1C. That is a very vital test that shows what the average level of blood sugar control is over the preceding three months. When we testified several years ago, you raised our attention to the fact that many patients are receiving this test done in the office and they may have sickle cell trait, and that is a confounding variable, and, as a result of that, we did develop this public awareness campaign, and in no small part due to that most of the tests that are done are now in compliance with the understanding that there is interference of the sickle cell and other genes that can cause a problem. So essentially all of the commercially available testing for A1C is done using systems that can--that having an abnormal hemoglobin is no longer problematic. Ms. Lee. Thank you very much. Mr. Chairman, let me just say to the Committee that this was very important because so many people I know--family members, friends, people in especially communities of color-- there were a lot of people who had false positives because of the fact that they had been tested with the wrong test, and did not even know they had the sickle cell trait. So this was a very important effort that started in this Committee, and I just wanted to thank you all for that. And I am glad to hear now that they have changed the testing now is clear in what to do and look forward to your report back on the sickle cell trait, because I know a lot of people who I just talk to and say, look, do you have the sickle cell trait, and they say we do not know, and will ask their doctor to test them and, lo and behold, they have the trait, which, of course, means certain kinds of medical tests would not be valid or they need to do certain things in terms of their health. But unless you follow from birth in the States that do do the testing and somehow people know as an adult they have the trait, they get in a lot of trouble. So we need to really figure out how to make sure that that happens, because most people I know, especially most African-Americans, do not ask their doctor to test them for the sickle cell trait. Thank you. Mr. Obey. Mr. Lewis. FISCAL YEAR 2011 FUNDING Mr. Lewis. Thank you very much, Mr. Chairman. Gentlemen, very much appreciate your presence here today. The Chairman has appropriately outlined the pattern of funding for NIH over time. There is a piece of that that concerns me. You know, beauty lies in the eyes of the genuflector, and with NIH funding we had a very significant increase in the 2009 fiscal year as a result of the stimulus package. I have some questions about that, but, most importantly, I am concerned that even though the President's budget has a $1,000,000,000 adjustment, if you take where we were in 2009 and that dollar amount, one could argue that there is an $8,000,000,000 reduction, if real value came from that stimulus funding. So I would like to have some commentary regarding that and how you have budgeted to try to deal with that adjustment, if it remains as a part of our pattern, and very much be interested in knowing--maybe Dr. Fauci would like to respond to this piece of it. There has been consistent adjustment also for Labor, Health and Human Services across the board, with a similar big adjustment in 2009. If I were looking at those adjustments and readjusting budgets, I would make sure that continuing funding flowing to NIH would have very high priority in those considerations. There is a broadly based nonpartisan support for research, applied research as well as the basic research. Lots of discussion that is healthy, pushing you to get more in the direction of the applied research, but, nonetheless, we need to preserve this nonpartisan environment in this Committee and otherwise. So if you would start with that, Dr. Collins, I would appreciate it. Dr. Collins. Mr. Lewis, I appreciate the question and I do appreciate the strong bipartisan support for medical research that has characterized the actions of this Subcommittee for many years. The diagram that you see on the screen there shows you what the total funding allocated for NIH has been over the course of the past decade, and, as you can see, after a period of flat funding from 2003 to 2008, with only modest increases, then, as shown in red, the Recovery Act dollars, $10.4 billion, were given to NIH, but obviously as a two-year enterprise, so roughly $5 billion each year. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8233B.118 And the budget is here shown for fiscal year 2011, and I think you can see the delta there, and, in fact, this is the cliff that people are talking about, because effectively in fiscal year 2010, if you include the Recovery Act dollars, the total funding that NIH has had available is $36 billion. What is proposed in the President's budget is $32 billion. Now, let me say that given the very difficult economic times, the President's support of science and the willingness to put forward a $1 billion increase for NIH is reflective of the Administration's strong support for research and what it can do, and we are deeply grateful for that, because certainly it could have been justified, at a time of growing deficits, to be even more conservative here in terms of providing support for this. So the $1 billion is certainly something we are delighted to see come forward, although it is a dollar figure which basically matches the inflationary index for biomedical research, just about 3.2 percent. We were aware that this might be an outcome. What we have tried to do--although I would not tell you that we are going to be completely successful in reducing the consequences of this cliff--certainly some of the money funded by Recovery Act has been for one-time expenditures, special equipment needs, for instance, that universities across this Country have been clamoring for years during the flat funding; construction grants also to help those universities and institutes build up their physical plant or to do some renovations that are badly needed. We have tried to fund special projects that we thought could get done in two years. The Cancer Genome Atlas, which went from a pilot phase into a full-bore assault on understanding cancer, and which, with that accelerated funding, will tell us in two years the basic landscape of cancer for the 20 most common cancers at the DNA level, a dramatic series of advances. But we also funded a lot of innovative grants. We invited investigators out there to come forward with their best ideas, and they came forward in great numbers with exciting, innovative stuff. When I arrived at NIH in August, one of my first tasks in those first few weeks was to read a lot of these grants that came forward asking for support from the Recovery Act, and these were really exciting, innovative, many from investigators that had not previously come forward to NIH. But science is, as I said in my opening statement, not a 100-yard dash, it is a marathon, and two-year cycles are really not the way that advances occur. So we are going to face a crunch in fiscal year 2011. We will be, I think, gracious to investigators who were funded during the Recovery Act for two years and who asked could they please have a no-cost extension for a third year. We will probably, with good justification, be willing to do that in order to try to smooth this out a bit. But there is no question that if you measure what happens in terms of success rates, that is, what is the chance that an investigator who sends a grant in to NIH is actually going to get funded, that is going to be a tough number in fiscal year 2011. That number used to be, back in the course of the last 30 years, around 25 to 35 percent. That was the success rate for grantees. It has trickled down more recently to 20 percent. Our predictions are that in fiscal year 2011, with this budget number, it will be more like 15 percent, one grant out of every. Mr. Lewis. Dr. Collins, your response has taken up my time, but---- Dr. Collins. I am terribly sorry. Mr. Lewis [continuing]. In the meantime, I would hope, as you see some of those vacuums or difficulties, that you and your people, Dr. Fauci, would keep very much in touch with this Committee so that we can try to be responsive in ways that will accelerate those opportunities. Dr. Collins. Will do. Mr. Obey. Ms. Roybal-Allard. PANCREATIC CANCER Ms. Roybal-Allard. First of all, let me thank you all for being here and for the really important work that you do. However, I have had some concerns with regards to NIH's lack of responsiveness to this Committee on two particular issues. As you are aware, pancreatic cancer is the fourth most deadly type of cancer, with survival rates that have remained largely unchanged for the last 40 years. Yet, despite its lethal prognosis, only about 2 percent of the Federal cancer research budget continues to be devoted to pancreatic cancer. Recognizing the seriousness of pancreatic cancer, this Subcommittee requested, in fiscal year 2009, in the appropriations report, that the National Cancer Institute give a detailed account of what it would do to increase research and training on pancreatic cancer. When that request was completely ignored, the Subcommittee, in fiscal year 2010, again made the request for a plan to address pancreatic cancer. The NCI once again ignored the request and has no plan, and we are being told now that there is going to be a meeting held in the future to address pancreatic cancer. Since the Subcommittee has always chosen to respect the integrity of the scientific community by not directing funds or micromanaging NIH's activities, short of doing that, what does the Subcommittee have to do to get NIH to respect the requests of this Subcommittee and respond to an issue as important as pancreatic cancer? Dr. Collins. Congresswoman, I was unaware, until this moment, of this lack of responsiveness to that specific request about pancreatic cancer, and I would promise to give it my personal attention. Pancreatic cancer is a particularly lethal and very devastating type of cancer about which, as you point out, progress has been rather limited. We do have some, I think, exciting opportunities on the horizon, particularly trying to understand at the detailed molecular level what are the first steps that cause pancreatic cells to begin to grow into a cancer and what might we do in terms of developing early detection methods based upon that, because that is obviously much of the problem, is not detecting this disease until it is already far advanced; but, most importantly, to develop new treatments that are targeted towards those specific pathways that seem to drive this cancer. Again, the Cancer Genome Atlas will provide that kind of information for our 20 most common cancers, and that includes pancreatic. But I am distressed that you feel that this Committee has not been answered in the requests you have made about this, and I will personally look into that. I will tell you that in the relatively near future we anticipate that a new Director of the National Cancer Institute will be named by the President, and I will be certain, if that happens, that this concern of yours is conveyed. CLASS B DEALERS Ms. Roybal-Allard. I would appreciate that. Thank you. One other area of concern has been the use of Class B random source cats and dogs for NIH-funded research. We were pleased when NIH stopped purchasing dogs from Class B dealers for use in intramural research, but remain concerned that the practice still continues in some of the extramurally funded NIH research. So last year, once again, this Committee, in their report, asked NIH to submit a detailed plan for phasing out random source cats and dogs and extramurally-funded research. Again, NIH has ignored this Subcommittee's request and we have seen no plan. So my question to you is how much progress has been made towards phasing out this practice and has NIH identified all current NIH-supported extramural projects using Class B dogs and cats? And, if so, how many? Also, does NIH have a plan that we have not seen for implementing a phase-out of the use of dealers by its grant recipients? Dr. Collins. Congresswoman, again, I am sorry that this response has not been forthcoming in a timely fashion. I know it was due on April 1st. I can tell you that it is very close to being finalized; we wanted to be sure that we had answers to all of those questions. I can tell you the substance of the response will be that, yes, NIH is making a plan to phase out the use of Class B dealers for animals. It is not possible to do that overnight because the needs for animals that currently have been coming from Class B dealers for cardiovascular research and transplant research would be injured rather badly if we did this in a precipitous way. But we will transition over the period of roughly three to four years into a circumstance where we no longer depend upon Class B dealers for animals, and we arrange to have the breeding Class A suppliers fill that need. Again, that report should be coming forward to you very soon. Ms. Roybal-Allard. Thank you. Appreciate that. Mr. Obey. Mr. Rehberg. BREAST CANCER MAMMOGRAPHY GUIDELINES Mr. Rehberg. Thank you, Mr. Chairman. Welcome. I always feel like apologizing to somebody with your talent and credentials. And you have entered into the political realm of our world, so I guess my questions probably will be a little more political from the perspective of the comparative effectiveness research that we were talking about before. While this organization is not necessarily under your purview, the U.S. Preventive Services Task Force, they have certainly created perhaps a firestorm within the breast cancer community, and I would like you to talk a little bit about your own concept of personalized medicine as it relates, then, to some of the comparative analysis that you are going to be doing within your research, because I will just use breast cancer as an example. This was in the New York Times, an influential group, the one I referred to, provides guidance to doctors, insurance companies, and policy makers, and they have now made the recommendation that mammograms do not need to occur until 50, as opposed to 40; and that was wildly hailed as a step forward by the National Cancer Institute, National Breast Cancer Coalition, Breast Cancer Action, National Women's Health Network welcomed the new guidelines, and, of course, the insurance companies will take that as, well, I guess we do not have to cover that until they are 50. Unfortunately, on the other side are the American Cancer Society and the American College of Radiology. So a fight has been created that will probably rage on for quite some time. How are you working or how do you intend to keep those kinds of food fights out of NIH? Because it has the potential of creating a lot of politics for you in an arena that research and science should not have politics. This is just one example, and it is the most recent example of something that is going to occur as a result of something similar to the comparative effectiveness research that is going on. Dr. Collins. Well, Congressman, I appreciate the question and this certainly is an example where those recommendations from the USPSTF on mammography created quite a firestorm of controversy. Specifically, NIH is not in the business of establishing practice guidelines, for the most part, and in that instance the National Cancer Institute stayed out of the fray, basically. Our role is to provide the kind of data that might allow the establishment of guidelines that improve outcomes, and that is something that we are very determined to do. When it comes to the mammography guidelines, I think you brought up the issue of personalized medicine. Perhaps the path forward here is for us to be more clear about how to utilize individualized information to make better predictions, because while there may be women who are not going to be benefitted by a mammogram in their 40s because they are at very low risk, there are others who are at higher risk for whom that is a highly appropriate procedure. The Task Force recommendations touched on that, but we did not have enough data to actually be able to say how do you factor that in. That would be one of the things that NIH very much wants to work on. FUNDING FOR COMPARATIVE EFFECTIVENESS RESEARCH Mr. Rehberg. I feel very comfortable with your credentials. You are probably the right person at the helm of NIH at a time when we are spending a lot of money on this kind of comparative research. But the problem is--or not necessarily a problem--I do not want to create a problem--have you created an objective conclusion for the various research? You are spending $400,000,000 on this kind of research, but if it does not come to a conclusion, all it does in this kind of a case is create more confusion in the minds of the patient, the poor 41-year- old woman who does not know what to do now. And again I go back to this is an influential group that is now making a recommendation that provides guidance to doctors, insurance companies, and policy makers. So are you going to have $400,000,000 worth of confusion created at NIH similar to this, which is what this has done? Dr. Collins. Well, we certainly do not want that outcome, Congressman, and, again, the mammography circumstance had data that fed into it from a variety of perspectives, much of it not supported by NIH. If you look at our comparative effectiveness research portfolio, what you see are things like the Diabetes Prevention Program that Dr. Rodgers described. Now, there is an example where we learned by rigorous data analysis that in fact an intervention to prevent diabetes--which many people were not that convinced was going to work--worked spectacularly, and it worked better than the alternatives that are commonly used in practice, and that is now---- Mr. Rehberg. Okay, so you will stay out of this controversy and anything else that is controversial? Dr. Collins. No. No, not at all. No, I am not trying to say that. Mr. Rehberg. Well, then what would be your conclusion here? Are you going to back the---- Dr. Collins. My conclusion is that NIH's role is to do research that generates rigorous evidence that can guide conclusions that are based upon data, and we will do everything we can to provide that kind of data to guide those organizations outside of us that are going to try to decide what is right for the individual as far as their health care. Mr. Rehberg. So you are going to pick a fight. Dr. Collins. We are going to try to---- Mr. Rehberg. Because you are going to provide data to both sides and then step back and watch them duke it out. Dr. Collins. I think we believe that data that is based on evidence and reason is a good thing to add to any discussion, and we hope to be the providers of that. Mr. Rehberg. Thank you, Mr. Chairman. Mr. Obey. Ms. McCollum. PRIVATE SECTOR INNOVATIONS FROM NIH INVESTMENTS Ms. McCollum. Thank you, Mr. Chair. I think what I heard clearly you said is that more research needed to be done so that people could make a better informed decision between doctor and patient, and that is your goal and your focus. Dr. Collins. Well said. Ms. McCollum. Thank you for that. Mr. Chairman, members of the Committee, I see NIH as a public good. Like highways and clean waters, NIH is a benefit to our entire society. Those benefits are widespread, long lasting, and not always immediately profitable, where we see immediate return. That is why private business does not do and cannot often make the investments that NIH makes. So funding for the public good is one of the most important functions that the Federal Government has, and I think you gave us some excellent examples in the three patients that you provided, and I know you have hours and thousands, tens of thousands of success stories. So the investment that this Committee is getting ready to make in the NIH are not only critical to the health of our citizens, but they also contribute to the growth of our economy. Dr. Collins, I am going to take a little different track in some of the questions I am going to ask you and the panel here today. In your testimony, you state that every $1 of NIH funding directly results in more than $2 in economic output. The indirect and long-term benefits from NIH investments are greater, and I would like you to talk a little bit about that this morning. So could you please tell us how investments in NIH lead to private sector innovation, both directly and indirectly? Where would the drug industry, the medical device sector, or any of the other major aspects of the U.S. health care sector be without the basic research that is supported by NIH? Thank you. Dr. Collins. Thank you for the question. And we do believe that by medical research investments at NIH are, besides being a wonderful stimulus of advances in health care, also a wonderful stimulus of the economy, and the evidence is very compelling for that. Economists agree that American economic growth since World War II, more than half of that has been driven by science and technology. And if we are looking for an occasion to try to get our economy back on track, this sort of economic investment makes a lot of sense. You quoted the direct effects of NIH investment, this more than twofold multiplier effect in one year. But if you look at the indirect effects in terms of our interactions with the private sector, if you look, for instance, at the development of new drugs, roughly 60 percent of new molecular entities that are put forward by pharmaceutical companies for FDA approval cite an NIH publication or an NIH patent as being fundamental to how that came forward. And if you look at the jobs in the biopharmaceutical sector that are directly, therefore, related to things that NIH has supported, that is 3.2 million jobs at the present time; and these are high-quality, high-paying jobs that we do not want to see go overseas instead of having them exist here. If you look at the way in which investments are being made by the pharmaceutical companies in research, again, much of that based upon the foundation that NIH provides, that is $56 billion of research investments done by the private sector exceeding what NIH is putting in at a little bit more than half of that. The whole landscape, then, I think you can see is very much triggered by this. Let me give you an example of a company called Affymetrix in California, which is the main purveyor now of these DNA chips which have become a revolution in research and in clinical practice. They are the reasons now that people can actually get personalized medicine readouts, as I have done myself. This was started on an NIH grant, as a single investigator with a great idea; and here we are now with a company that has capitalized in the billions. I could give you many more examples. But I think your point is extremely well taken. People think of NIH--and we are glad about that--as the place where new cures for diseases are being sought, but it is also a place where our economy is getting one of the best kinds of stimulus it could. Ms. McCollum. Thank you, Mr. Chair. And I want to thank past members of this Committee for all the work they did in the genetic research that has led to the gene therapies that are out there now. If people were not willing on this Committee to invest in science, we would not only not have the cures, but we would find other countries getting far ahead of us in this technology and job creation field. So thank you, members. Mr. Obey. Thank you. Mr. Cole. PRIORITY SETTING FOR RESOURCE ALLOCATIONS Mr. Cole. Thank you, Mr. Chairman. Thank you for being here and thank you all very much for the work that you do; it is extraordinary. A number of years ago our Congress passed the Caroline Price Walker Conquer Childhood Cancer Act and we authorized $150,000,000 a year for pediatric cancer research over a five- year period. We, as a Committee, never chose to fund that, to appropriate money for that purpose. When you are confronted with a situation like that, where you have sort of congressional authorization on one hand, this Committee does not--because, frankly, I think it is very careful about trying not to interject itself into what are scientific decisions--how do you take something like that and balance it and make basic decisions? Or do you at all? Dr. Collins. Well, it is a daily discussion that goes on amongst the NIH leadership about how to set priorities, Congressman, and it is not an easy task when we have so many opportunities and the resources are not sufficient to chase after all of them. A lot of this depends on scientific opportunity. Simply throwing money at a problem, even if it is a critical problem for public health, is not necessarily going to get you where you need to go; you need to see is there an idea here, is there a research project that could push the ball forward? So we are always trying to both weigh public health needs, as well as scientific opportunities. We do not want to neglect rare diseases--and many pediatric cancers are rare--just because they do not affect that many people, because if it is your family where a child has been stricken with cancer, it does not matter a whole lot to you that that happens to be a rare disease. With pediatric cancer, we have certainly adopted that as an area of great priority because of the terrible toll this takes on young people and their families. We have made great strides in many of these cancers that occur in children, but we have many others, particular solid tumors, for which we are not as successful as we would like to be. The good news here is I think we have the tools--and this was sort of a couple of the themes that I talked about in my opening statement--both in terms of really laying out the landscape of why cancer occurs in children and accelerating the process of going from that understanding to a therapeutic; and that is moving forward at a pace that would not previously have been imaginable, and we are empowering academic investigators to take a larger role in the development of therapies, which, in the past, was largely left to the private sector. And for pediatric cancers that are rare, there is not much of an economic incentive to develop a new therapy if it is going to be risky. If academic investigators could de-risk the project, then it becomes more attractive. The Cures Acceleration Network is another example of an authorized, but not yet appropriated, effort that I raised briefly in the opening statement that we are quite excited about because it would facilitate this process. PEDIATRIC CANCER RESEARCH Mr. Cole. Well, quite often our colleagues count on this Committee to protect them from themselves, so this may be one of those instances, I do not know. Let me ask you a follow-up question. I have gotten two different sets of responses--and they are not dramatically different--on how much money is actually devoted toward pediatric cancer care. From Director Worzog I think we had a communication that suggested it was something like $215,000,000; from the NIC we got an estimate like it was $195,000,000. Do we have any idea what the range, relatively, of dollars devoted in this effort is? Dr. Collins. I do not have the numbers in front of me, Congressman; I can certainly provide them for the record. We do now have a better method of tracking how NIH is spending its dollars than we have had in the past, something that got unveiled about a year ago. So we are able to tell you, I think, accurate numbers based upon our entire portfolio. [The information follows:] Pediatric Cancer Research NIH has not set its tracking system on disease spending to be able to capture estimates for childhood cancers or pediatric cancer research funding across all of NIH. However, these estimates are available for research funded by NCI. The estimated funding level in Director Orszag's letter reflects the NCI-projected FY 2010 funding level for pediatric research (approximately $215 million), which is a broader research category than childhood cancer alone, and includes research related to child health, childhood cancers, birth defects, multiple sclerosis, etc. In FY 2011, NCI expects to fund pediatric research at $233.7 million. NCI also projects funding in the category ``childhood cancer research'', which is a subset of pediatric research and includes only childhood cancer research (such as childhood leukemia and neuroblastoma). The National Cancer Institute (NCI) estimates it will spend $196.3 million in FY 2010 and $202.7 million in FY 2011 on childhood cancer research. This is the funding level that was provided in the recent NCI document. The key difference between these two categories of research is pediatric research is a broader category that includes research related to child health in general, whereas childhood cancer specifically deals with cancers affecting children. NCI's Pediatric Research and Childhood Cancer Funding, 2007-2010 (dollars in millions) ---------------------------------------------------------------------------------------------------------------- 2010 Year 2007 2008 2009 (estimate) ---------------------------------------------------------------------------------------------------------------- Pediatric Research.......................................... 243.2 235.4 240.8 215.0 Childhood Cancer............................................ 172.7 189.7 192.9 196.3 ---------------------------------------------------------------------------------------------------------------- Mr. Cole. That would be very helpful. I would really appreciate that. And particularly if you could trend-line is over several years, if that was possible, so we could sort of see relatively where we are headed. Finally on this topic--and you have answered this partly, but I just want to give you an opportunity to add anything else you would like to--where do you see us going in pediatric cancer research over the next five or ten years? Dr. Collins. I think it is going to be a very exciting time. We will have the ability to identify what are the basic molecular drivers of a cancer that occurs by analyzing hundreds of these tumors and figuring out precisely what has gone wrong; what has made a good cell go bad and have it start growing in this fashion. I should say, by the way, there is a wonderful new partnership between St. Jude's and the Genome Center at Washington University in St. Louis involving $60 million of private philanthropic donations to make this go forward for pediatric cancers on hundreds of tumors. We are going to, therefore, be able to say what are the targets for which we need magic bullets, and we should be able, in the next five or ten years, to transform our approach to pediatric cancer from the chemotherapies, which can be successful but which, as you know, are also quite toxic, into compounds that are much more directed, much more rational; more likely to be effective, less likely to be toxic. Mr. Cole. Terrific. Thank you. Thank you very much, Mr. Chairman. Mr. Obey. Mrs. Lowey. FOOD ALLERGIES Mrs. Lowey. Thank you very much, Dr. Collins, Doctors all. I must say, having served on this Committee for many years, this is one of the most exciting hearings that we have, and I do wish we had hours, but we do not want to take you away from your important work, so let me just thank you for your service to the Country and to the people, and we look forward to continuing to increase the appropriations. A few particular areas, first with food allergies. It is very frustrating, to those who suffer, that the only advice doctors can give now is do not eat certain foods. And as you probably remember, shockingly, it took me five years, five years to get legislation passed that mandated clear labels on food. But now at least allergy sufferers and celiac disease people call me and tell me how grateful they are that we have those labels on food. So two questions. Allergies. I never had them until I got here to Washington. What progress are we making in understanding why the same amount of allergens has minimal impact on one person, lethal to another? And we are any closer, Dr. Rodgers, to understanding why the number of children under the age of five who suffer from peanut allergies has grown so much between 1997 and 2002? Every school has peanut tables; many schools do not allow peanuts to be served. Perhaps you can respond. Dr. Rodgers. We are going to redirect it. Mrs. Lowey. Wrong directions. Dr. Fauci. Dr. Rodgers. I would be happy to talk about celiac, but let me turn to my colleague. Dr. Fauci. Thank you for the question. It is obviously very---- Mrs. Lowey. How could I forget my good friend Dr. Fauci? I do not know. Yes. Dr. Fauci. It is very important, as you well know. Four percent of the people in the United States of America suffer from food allergy, peanut allergy being one of the most severe. Your question about the differences in individuals are clearly related to genetic predispositions. We do not know the exact genetic profile that would pinpoint someone who has a propensity, but clearly these are things that run in families, which strongly point to it being genetic factors, which, as Dr. Collins mentioned in many of his remarks related to other diseases, the more we get a better handle on the genomic basis of disease, the better opportunity we will have to do one of the things that Francis mentioned, more personalized medicine approach. And I think allergies and the response to allergies and the desensitization to allergies are going to very, very much fall into that category of personalized medicine. The other question you asked is that why does it seem like we have more peanut allergy now than we had before. Well, the honest answer is we do not know. But we do feel that one of the issues that may contribute to it is that, because of the greater sensitivity in the community to the possibility of peanut allergy, more families are withholding peanuts and peanut derivatives from children early on in their lives, which, in our research projects now, we are finding that that might actually, if a person is not allergic to peanuts, have a paradoxical, deleterious effect, because some studies are showing now that when you give children, at a very early age, exposure to peanut, you naturally desensitize them to any allergy they may have. There is a very interesting Israeli study that shows that early exposures to peanuts actually wind up having a lesser incidence of peanut allergy as the child gets older. So there is a lot of active research going on. We are very excited about it. We are getting new young investigators in the field, and I hope in a year or so we will be able to give you even more encouraging information. PEDIATRIC DIABETES Mrs. Lowey. Thank you very much. I was looking at you, Dr. Rodgers, because a group of children came to my office just this week who suffer from diabetes, and it is extraordinary to see the advances in treatment. Little children are taking care of themselves. But we are not preventing diabetes and we are not curing diabetes, and perhaps you can--I am not talking about adult onset diabetes; I am talking about those that are affecting our children. Perhaps you can comment on the research there and what progress are we making. Dr. Rodgers. Thank you. We are actually making extraordinary progress on the treatments for kids with type 1 diabetes, the type that you are referring to. In fact, just to back up to one of the points that you made. What we are learning a lot about diabetes, actually type 1 diabetes, which is an autoimmune disease in which the body, for unclear reasons, turns against these insulin-producing islet cells in the pancreas, are actually giving us clues to patients with celiac disease. They share many features. So what we are learning in this particular disease may also have implications in a disease that perhaps affects about one percent of the U.S. population, that is, celiac disease. In diabetes, we are trying to--this is a disease that affects individuals who have a particular genetic susceptibility, and within the last few years the number of genes that account for this susceptibility has greatly increased. Today there are over 40 susceptibility genes, which account for more than half of the predilection for developing the disease, so what that means is that we can identify, early on, which kids are likely to develop type 1 diabetes and when. Now, it is thought that there are triggers associated with this, and understanding what the environmental triggers are is extremely important. We have almost, very recently, completed a study, a recruitment of about 7,800 infants who have this high type 1 diabetes propensity to follow them for a period of 15 years to understand what it is in the environment that is leading to the disease is it something that they eat, is it something in the environment, et cetera? And this work is going on with other work that is funded by the NIH in specific areas, for example, the National Institute of Child Health and Human Development (NICHD) is funding a study comparing the effects of hydrolyzed infant formula to that of cow's milk, because there are a number of people who believe potentially that cow's milk may be that trigger. And that work is proceeding quite well. The NIH, in association with the CDC, has also, for the first time, developed a surveillance program to look for diabetes in youth. This includes both type 1 and type 2. But, importantly, having CDC's involvement, and because of their ability to do surveillance within States, we can better understand the clustering of type 1 diabetes that we are seeing. This may point to specific triggers in certain locales. And this is just in the surveillance. I can provide you more, because I see my time-- [The information follows:] Pediatric Diabetes If we find the trigger, we may be able to develop a vaccine or implement a change in diet that can prevent the disease. In addition to research to uncover the genetic and environmental components that contribute to the cause of type 1 diabetes, the NIH is pursuing research to prevent, treat, and one day cure type 1 diabetes. For example, Type 1 Diabetes TrialNet tests strategies for type 1 diabetes prevention and early treatment. TrialNet recently reported that the drug rituximab could preserve the function of the insulin-producing beta cells in people newly diagnosed with type 1 diabetes. Previous clinical trials have suggested that preserving patients' remaining beta cell function can have dramatic, long-term health benefits. TrialNet has also launched a trial testing the ability of another agent, oral insulin, prevent the disease in people who have high levels of insulin autoantibodies, a pre-clinical marker of the disease. TrialNet also has two other prevention trials that will launch soon or are under development. An earlier, landmark NIH-supported clinical trial showed that improved control of blood sugar beginning as soon as possible after diagnosis can greatly improve the long-term prognosis of type 1 diabetes and result in reduced rates of life-threatening diabetes complications. This research has contributed to the fact that people with type 1 diabetes are living longer and healthier lives than ever before. However, blood sugar control is not always easy and even the most vigilant patients are at risk for sudden, acute episodes of dangerously low or high blood sugar levels. The NIH is deeply committed to helping patients achieve good blood sugar control and is taking two approaches to realize this goal: beta cell replacement and development of an artificial pancreas. With respect to beta cell replacement, the NIH supports the Beta Cell Biology Consortium (BCBC), which is studying ways to grow beta cells in the laboratory for transplantation into people and examining strategies to promote new beta cell formation in the pancreas. BCBC scientists are gaining key insights about beta cell biology and development, which is paving the way toward new cell-based therapies. The NIH also supports research toward the development of an ``artificial pancreas''--a mechanical system that links glucose monitoring to insulin delivery--and has the potential to alleviate an enormous amount of patient burden. Mrs. Lowey. Thank you. I see that. But I look forward to it and thank you again, Dr. Collins. Mr. Obey. Mr. Moran. ENVIRONMENTAL CAUSES OF ILLNESS Mr. Moran. Thanks very much, Mr. Chairman. I want to follow up somewhat on the line of inquiry of Mrs. Lowey and Mr. Cole. First of all, NIH, of course, has done wonderful work. The whole Nation is justifiably proud of all you have done. In your opening remarks you cite the extension of life and the progress particularly in cardiovascular disease, the fact that older people with chronic disabilities is down markedly. But much of the effort, at least in the past--now, I can sense kind of a shift here--has been on those called the dusk of life, and less emphasis on those at the dawn of life. That is why I was particularly impressed by a lot of the questions from the panel. Something is happening among our children. This past generation, for example, the rate of asthma has tripled. Cancer is now, for the first time, other than accidents, the primary cause of childhood death. One in every six children is born with a developmental disability now; attention deficit disorder, dyslexia, but in many cases significant mental disability. One in 59 children is autistic. And we have talked about obesity, and it is just stunning that one in three children now, we estimate, will suffer from some form of diabetes, we understand. There was a study commissioned by the Environmental Working Group that looked into umbilical cord blood, and they found that there were 232 industrial compounds in that umbilical cord blood. Many feel that what is happening with this most recent generation is a result of environmental factors; it is something we are breathing, we are eating or drinking. And it could well be the number of chemicals that we now depend upon for our food supply. Cow's milk, I read a number of studies that it may have a direct link to diabetes. You have the National Institute of Environmental Health Sciences (NIEHS), and it is kind of a new thing. For a while it was sort of marginal in terms of focus. Well, that is true, Doctor, you know that. You do not need to be defensive about it, but it really was not NIH's focus. But I think, as we see what is happening in this new generation of young people, these dramatic statistics point to environmental causes that we need to coordinate with our research. The endocrine disruptors is one. In the Potomac River here, that we are all familiar with, every single small mouth bass--and that is a principal fish species--every single one of them is intersexed. Something is wrong. So I wonder--my first question really would be the extent to which we are integrating some of our findings with what the NIEHS is coming up with. Dr. Collins. I appreciate the question, Congressman, and I agree that studying the environmental impact on diseases of children and of adults is a very high priority. We may be able to understand hereditary implications, but we are not going to change those anyway, so it would be much better if we understood how those interact with the environment. And this has been one of the challenges, because a compound that in a certain concentration might be entirely safe for one person may actually be quite dangerous for another; and if we do not understand those differences, we have a very hard time identifying what in the environment we should pay attention to, because it all gets sort of blurred out by those individual differences. With regard to children, the National Children's Study, which is in its pilot phase of enrolling participants--and we are working hard to figure out how to do that in the most effective and cost-effective way--aims to follow 100,000 children preconception, all the way through pregnancy, and then until age 21. And a big part of that study is to collect the most sophisticated data we possibly can on environmental exposures, including in utero exposures, to try to see whether we can draw conclusions that so far have escaped us about what is causing these many different problems that we see in pediatrics. That is the most ambitious enterprise that has yet been mounted. But, meanwhile, there are specific efforts in specific diseases to try to collect that kind of information, for autism, for instance. Certainly for pediatric cancers, if you see a cluster, what is going on there in terms of environment? The difficulty we have oftentimes is we can measure the presence of many of these compounds, and we know that in larger concentrations they are not safe because animal studies have told us that. We often do not have the data to know what level would be safe, if any. So our environment, which is full of the consequences of industrialization, may have things in it that, if we understood them better, we would want to get out of there, but the data is often insufficient to be confident that we know that answer; and what is the safe level is often the question for which there is not a clear response. Mr. Moran. Thank you. Mr. Obey. Mr. Kennedy. MENTAL ILLNESS AMONG VETERANS Mr. Kennedy. Thank you, Mr. Chairman. Welcome all of you. Thank you for your service to our Country in a very significant way in reducing the burden of illness for our people. One of the big burdens of illness for our people, and certainly an area where our budgetary dollars are so significant now, more than ever before--and if I could ask you all to comment on that with respect to the recent technology and the opportunities for that technology in the research that we have uncovered so far to make huge advances in this area as it relates to all of your institutes and every institute--is in neuroscience. And particularly, talking about the burden of illness, my colleague, Mr. Moran, just mentioned autism and the prevalence of autism. Others of my colleagues have mentioned the burden of illness of Alzheimer's with the aging of America. And then, of course, you already have, as Dr. Insel knows, the huge burden of illness of mental illness in this Country, and addiction and substance abuse. And then on top of all of that you have a bow wave of needs coming down the line with our veterans population, and that is what I want to ask you about. I know that there is greater coordination within the institutes on sharing relevant science amongst yourselves. When you are under a budget that Mr. Obey understands is part of the cap on discretionary funding increases, but Department of Defense and the VA are not, what I would like to know from you is to what extent can you coordinate your neuroscience research and--by the way, they have a big portfolio in areas that you also do research--that affect the veteran. And I would like to know to what extent do you coordinate your work with perhaps medical research that is designed to help the veteran, because clearly the veteran is going to be-- their challenges are going to also be the challenges of America with respect to all of these issues, because in finding out more about Traumatic Brain Injury (TBI) and Post Traumatic Stress Disorder (PTSD) and the complications of those, we are going to also find out the answers to many of these other issues. And I even point out diabetes because not only do we know the correlation between depression and diabetes, but I know that there has just been a drug approved for type 2 diabetes that relates to neurotransmitters in the brain. And it is ironic because most people think it has to do with the pancreas. Now we know it has to do with the brain, just to show the interconnections in whole health. So, Dr. Collins, if we could start with you. Dr. Collins. Well, Congressman, you put your finger on a very important issue, and that is the need for us to collaborate across agencies to try to improve health in the area of neuroscience, and I think it is fair to say that that is a topic of great interest. Certainly the topics you mentioned--traumatic brain injury, PTSD, Alzheimer's--have all been areas in which we now have developed partnerships with the Department of Defense and with the Veterans Administration. I am going to ask Dr. Insel, because he is intimately involved in several of those, to cite a few examples in answer to your question. Mr. Kennedy. And, Tom, if you could--by the way, I loved meeting Laura the other day. Anyway, I just want to say do you know if there is the same collaboration within VA and DOD that you have within NIH with respect to the various institutes, in terms of their neuroscience collaboration? Dr. Insel. Thanks for the question. I do not actually know what coordination goes on in terms of neuroscience between DOD and VA. It would be a great question to pose to each of them. I can tell you that for the collaboration with DOD, this is very tight and real, and it is a project that really came about because of the DOD's concern, the Pentagon's concern with the rising rate of suicide. As you know, there is a doubling of suicide amongst active duty soldiers. Last year, 160 suicides in the Army. That is actually more than the combat deaths in Iraq. Mr. Kennedy. Can I mention something, just if you could comment? Anahedalcystine. Do you know the drug that reduces inflammation in the capillaries, if given, in the brain, because it only goes to those areas where there is blood, so it covers the brain blood barrier? There is Defense Advanced Research Projects Agency (DARPA) research that shows that it can minimize or eliminate mild traumatic brain injury. Do you know about that research? Dr. Insel. We have a center that actually--it is a joint center between funded by the Veterans Administration and partly by DOD, but it is a joint center between the Intramural Program at NIH, National Institute of Neurological Disorders and Stroke (NINDS) and National Institute of Mental Health (NIMH), and the Uniformed Services University of the Health Services (USUHS), which is looking precisely at that issue. I just met with the folks from USUHS about a week ago and heard a little bit about their excitement about this, that this is perhaps a great way for an acute treatment for TBI. And they are also very interested in being able to visualize the changes using new neuroimaging techniques which are just coming online. So absolutely a very exciting area for science. It is not ready for prime time, but an area where it looks like we are getting some interesting advances. NATIONAL CANCER INSTITUTE CLINICAL TRIALS Mr. Obey. Dr. Collins, as you know, the New York Times published an editorial about a week ago which raised serious questions about waste of time and money with respect to clinical trials, and the editorial indicated that 40 percent of the clinical trials sponsored by NCI are never completed, and it quoted the Institute of Medicine as being quite concerned about the entire situation. I would like to know what your observations are, what your response would be to that report; where you agree with the concerns they raised, where you might disagree, and what you think ought to happen in order to correct the problem. Dr. Collins. I am very concerned about the outcome of that report. I should tell you that is a report the National Cancer Institute (NCI) asked the Institute of Medicine to conduct and brought in experts to look at the cancer Clinical Trials Network and draw the conclusion that, as you have said, there are major difficulties in terms of not finishing trials that get started, in terms of trials that take very long to get on the ground after they have initially been designed. And they make a number of recommendations which NIH and NCI are going to now take very seriously. One of the problems is that the networks are complicated in terms of multiple centers, and that is the nature of phase 3 trials, that they generally involve multiple centers. But there is so much bureaucracy involved in trying to get a trial started, some of that just being the paperwork, some of it being the human subjects effort, where every center has to have its own Institute Review Board (IRB) that reviews the protocol. We clearly need to move in the direction of more centralized IRBs. It is clear that some of the clinical trials are not necessarily designed in a way that takes advantage of some of the newer discoveries about ways that you could optimize a trial by identifying those most likely to respond and, therefore, making a smaller, more tightly focused trial that would give you a result more quickly; and we need to think about that. Some of this, though, I think relates to the fact that many of these were for rare diseases, and they simply were not able to enroll enough subjects to get enough power; and perhaps that was an unanticipated problem that should have been anticipated. So clearly what needs to happen--and I think the IOM recommendations are actually very well put and will be a great starting point for NIH--is to worry more explicitly about efficiencies that could be achieved that are not being achieved. Maybe we do not need to have so many centers if they are only enrolling a few patients each; maybe we could do this more efficiently with a smaller number of centers with larger enrollments. Maybe we need to prioritize what trials are really critical to do. And maybe we need to come up with a better way to encourage participation by patients, because right now only 3 percent of adult patients with cancer participate in clinical trials, compared to the majority of pediatric patients; and we have to figure out why that is and why we have trials that we cannot manage to fill. Mr. Obey. Well, my concern is that one out of every four Americans is expected to die of cancer, so this is not a minor problem. Dr. Collins. No. Mr. Obey. And people look at clinical trials as being the gold standard, and when we get a report like this, it raises really significant questions. I would ask that you keep in close touch with the Committee as you review those recommendations and concerns, because we are talking about not just a lot of lives, but a lot of money as well. But what is the main reason why you think so many of those clinical trials do not finish? Dr. Collins. I think many of them are for conditions where it has just been difficult to find enough patients with the precise conditions that had to be present to be able to enroll in the trial. They cannot find---- Mr. Obey. Would not that tell us something about what is going on at the front end, before those trials are ever started? How should that process be changed? Dr. Collins. I agree with you, it does tell you something about the inability to plan effectively about whether a trial is likely to be able to meet its enrollment criteria or not; and that is something that has to be looked at very carefully. Imminently, we will see the appointment of a new Director of the National Cancer Institute. I guarantee you this will be a matter of the highest importance for that individual. And I think, as you have said, we have to get this right, because we are going to see, coming forward, in the next five or ten years, a very exciting list of new cancer therapeutics. But we will only know if they work if we have a clinical trials network that can test them quickly and efficiently. This has to be the highest priority. Mr. Obey. My time has expired. Let me suggest we do a second round of about three minutes apiece. Mr. Tiahrt. BIODEFENSE RESEARCH Mr. Tiahrt. Thank you, Mr. Chairman. This may have been asked by Dr. Fauci than you, Dr. Collins. Last year we ended up transferring $304,000,000 from the Bioshield Reserve Fund to the National Institute of Allergy and Infectious Diseases, and we justified that additional research was needed because, before we can purchase countermeasures for use in the event of a bioterrorism event. Now, I was opposed to this; I think that it is better spent at the Biomed Advanced Research and Development Authority (BARDA)--in their advanced development program. But if these funds go to NIAID, will NIAID work with BARDA to ensure that the research is supported by those funds that address the issues that we are concerned about, and that is a bioterrorism event? And through these applications can you ensure that the funding will be spent on biodefense research? Dr. Fauci. Thank you for that question, Mr. Tiahrt. The answer is we work extraordinarily closely with BARDA. In fact, those very funds that ultimately came to us were spent in coordination with BARDA; they were allocated for the biodefense research and development. As you, I know, well know, we have an issue with regard to the far-end, downstream purchase of something to put into the strategic national stockpile, and what the NIH has been doing for decades, and does very well, is the fundamental basic research, concept development and preclinical development; and then there is a gap in the middle which many people refer to as the valley of death. Not a very good terminology, but it feels that way sometimes. And that is really what we needed to shore up with the funds that were technically transfers from BioShield, but really went into the research and development in close coordination with BARDA. So the answer to your question is yes, it will be. Second question, is it used for biodefense? Absolutely yes. CURES ACCELERATION NETWORK Mr. Tiahrt. Okay. Thank you very much. The valley of death, which we have referred to, I guess it was last authorization we put $500,000,000 in for the Cures Acceleration Network, or CAN, as we refer to it. Is CAN the best way to go about bridging this valley of death that we refer to, or are there other ideas that we should be considering? Dr. Collins. Well, I think CAN is a very exciting idea. The Institute directors will all be gathering for a retreat all day tomorrow to talk about this, because this is an opportunity in a very flexible way to try to push forward new and exciting approaches to therapeutics. The idea here is, as authorized, but not yet appropriated, is to provide large grants that include participation by public and private sector partners. It includes some flexible research authority to allow us, in a DARPA-like fashion, to move such projects forward rather quickly. And, if appropriated at a reasonable level, would allow multiple projects to go forward simultaneously with project managers that are authorized to both bring in resources when you need it and to kill projects that are failing, which is critical in this high-risk area as well. The idea here is to develop a new paradigm for how we come up with new therapeutic ideas, partnering in a new way with the private sector, where academics are de-risking projects, which, as soon as they become commercial viable, can then be out- licensed, so the companies can take them and run with them. And I think, from my perspective as a physician who is anxious to see therapeutic successes come forward, this is a mechanism that we very much need and hope to be able to utilize. Mr. Tiahrt. If I can just finish with a comment, Mr. Chairman. One of the things we saw in the DARPA program is that when we had new ideas that ended up not pursuing, failed, in other words, the people who were managing those programs got a black mark on their resume. And I hope that when you are pursuing new ideas, that just because the idea does not work out does not mean the person failed; it may have been a very successful way of finding out not to waste more money. So please look at the individual and not put a black mark on their record just because they happen to be managing a program that is not what we want to invest more money in. Dr. Collins. I agree with you, Congressman. Winston Churchill famously said that success is nothing more than going from failure to failure with undiminished enthusiasm. And one needs to keep that in mind. If we are not doing the kind of research that fails on a fairly regular basis, we are not pushing the envelope hard enough. Mr. Obey. [Remarks made off microphone.] Mr. Ryan. Thank you. I have been watching from my office, so do not feel like I have not been paying attention. [Laughter.] BEHAVIORAL RESEARCH Mr. Ryan. And I know not to ask about comparative effectiveness research. I know that ground has been covered. Just briefly, I know Mr. Moran has talked about this, and I heard Congressman Kennedy talk about it a little bit, the issue of behavioral sciences, behavioral research. And last time you were here I talked to you a little bit about mindfulness and some of the other approaches that I know NIH is looking into doing some research. Can you just kind of update me as far as is there anything that you have been doing over the last year that I should know about? Dr. Collins. So, Congressman, we agree that this is a fruitful area for research. Clearly, the mind-body interaction plays a significant role in lots of illnesses, both in terms of their occurrence and their adaptation to those who are afflicted with them. Certainly, several of the institutes have significant portfolios in this area. I would think the National Center for Complementary and Alternative Medicine particularly comes to mind as a place that is devoted to trying to test out some of these what people might call unconventional therapies, but which clearly many people in the public are convinced are of value, and we need to develop the data to underscore what that is. Already those kinds of studies, for instance, have shown some value of yoga in terms of helping people cope with chronic disease, and many others are being tested as well. The National Heart, Lung and Blood Institute is also engaged in a number of these. We have a new program in basic behavioral and social science research called OPPNET, which we think also will provide some of the foundational information to help us understand the correlation between behavior and illness. And I might ask my colleague, Dr. Insel, at NIMH, if he has other comments he would like to make about the mind-body connection because, of course, that is a topic of great interest in that area of medicine. Dr. Insel. Well, I would say it is a topic of great interest across much of NIH in the same way as Mr. Kennedy mentioned the development of the neuroscience effort across institutes so that it is not balkanized in any way. We have a neuroscience blueprint effort across 16 institutes and centers who are now doing this, as Dr. Collins mentions, for behavioral and social science research as well. So OPPNET is a new project; it is just getting off the ground at this point. It involves all of the institutes and centers at NIH and it will be a new forum, as well, for talking about these kinds of issues and their opportunities for taking those into a translational study of health. Our own institute has been very interested in the work of people like Richie Davidson in Madison. We fund a center that he runs on the study of mindfulness, not only understanding what its health implications might be, but also looking at the brain and looking at physiology to understand the biology of this process as well as the psychology. Mr. Ryan. Well, I appreciate that. I went out last year to see Richie's lab, and the work he is doing there is just amazing. And we are talking about adding 30 million people to the health care system, and I think this kind of individual responsibility, where we are actually teaching people how to manage their own levels of stress. We know what stress does to all of us in our daily lives, but over the long term that kind of high stress level leads to a lot of the problems that we are researching and spending a lot of money trying to figure out and then deal with and manage over time. So I would just encourage you to continue to go down this road. I was at a conference a couple weeks ago at the University of Massachusetts Medical Center was sponsoring, and across the board recidivism, education, health care, prevention, right down the line. There were some cops that were there from Portland, Oregon, talking about being more aware in these kind of intense situations. There were a couple of colonels there. There were military folks talking about building up some resilience in your mind before you even go off to battle so that, when you come back, you are more resilient, you respond better, and over time I think it will prevent a lot of the PTSD that Congressman Kennedy was talking about. So I just want to encourage you to go down this road. And whether it is health care or education, the idea that we can teach kids to focus--we always tell kids pay attention, but we never teach them how to pay attention. And this is a real way for us to teach kids how to pay attention, how to make better decisions, how to not get caught up in the moment and prevent problems. So I just want to encourage you, because the science is there. It is there, and I think the more your seal of approval and your street cred is on some of these initiatives, the better off I think we are all going to be. So I want to thank you for--the last point I wanted to make, too, in the field of education with social and emotional learning. I talked to the Secretary of Education about it when he was before this Committee. They have a metastudy that they did with 300,000 kids. There was an 11 percentile point increase with social and emotional learning, with some mindfulness involved in it as well. Eleven percentile point increase. You are teaching kids how to pay attention. And we cannot just tell them to pay attention and not teach them how to pay attention; how to deal with their emotions and regulate. When you realize that your emotions are prohibiting your ability to concentrate, then we have to take step one. It does not matter how much money we throw-- And I hope our friends on the Republican side, who do not want us to keep throwing money at problems, will join with us in some of this and realize we are going to teach kids how to concentrate, how to focus, and how to reduce their level of stress and save the health care system a lot of money. So I am glad I showed up, Mr. Chairman. Thank you. Mr. Obey. Mr. Lewis. COORDINATION OF RESEARCH Mr. Lewis. Thank you, Mr. Chairman. The gentleman's concern about health cost and quality is one I share with you, and it has nothing to do with partisan politics. But let me say this. Years ago a couple of our members suffered from Parkinson's, and that led some of us to organize in a nonpartisan way an environment where people who were doing research and treatment across the country came together, spent like a day and a half together. The amazing thing to me at the bottom line was that they had never talked to each other in any significant level before, emphasizing that which has been said several ways here today, the need to have voices within your institution pushing the kind of coordination that allows for us to tap many, many resources. Years ago we specifically were interested in the proton therapy process. At that time, NIH was not interested in the proton. I do not know if it was based upon cost or what, but they were not interested. So we took that issue to a hearing at the Energy and Commerce Subcommittee of Appropriations, rather than this Subcommittee; and, as a result of that, that subcommittee had about a dozen members on it and ten of them had cancer in their family. They were very interested and initial funding went forward. Since that time, it has been suggested this might be a great item for rationing because of relative cost for treatment, even though initially we knew there were prospects for small tumors in the brain, great success with prostate cancer; most recently, great success with non-invasive breast cancer treatment. But above and beyond that, NASA is very fascinated with this work because of how it can help them understand better the effects of radiation upon man perhaps in space. Well, that sort of coordination and communication could cause NIH to help us very much tenor and hold back the tendency of wanting to cut off avenues of research, as well as treatment, because of cost alone. So I would urge that to become a priority. Mr. Kennedy. I would hope maybe we could work together on getting DOD and VA to really figure out how they are going to coordinate like the NIH has on their neuroscience, because, really, the biggest amount of additional science in brain research is going to happen on TBI for the veteran, and that is going to accrue to Parkinson's, it is going to accrue to epilepsy, it is going to accrue to Alzheimer's and autism, and everything, because once you start researching the brain--and the VA and DOD are going to be--those veterans are going to be kicking down the door, as they did overseas, to all of these diseases here at home. Mr. Lewis. Mr. Chairman, he is referring to a project that Mr. Kennedy and I were going to begin to work on long-range relative to the problems with veterans and specific problems like alcoholism and drugs, et cetera, leading to homelessness. Unfortunately, Mr. Kennedy has made a decision not to run for re-election. Mr. Kennedy. That is why I am leaving it all in your hands, Jerry. [Laughter.] Mr. Lewis. Thank you, Mr. Chairman. Mr. Ryan. Mr. Chairman, I would like to intervene. I would love to help and make sure that this project continues. Mr. Obey. Mr. Kennedy. TRAUMATIC BRAIN INJURY Mr. Kennedy. I want to go back to this anahedalcystine. From what I understand, the DARPA showed that within the first 24 hours of a veteran suffering a concussion--and they can tell from your rapid eye movement whether you have--and there are objective standards--whether you have suffered this--that that goes right through the blood brain barrier because of the capillaries and it can have long-term impacts in terms of the suffering of the consequences of TBI. And it is sitting right now at the Surgeon General's Office of Review or whatever at I guess it is the Navy, because it is the Marine Corps. This is something that cannot be sitting around; it has to get out there. We already have FDA approval for this. This would be off-label use of it. So I am just asking, with your basis of science at NIMH and coordination within your group, if you can offer research and support to whatever that surgeon general is going to have to review in terms of that DARPA research, please, as soon as possible, because this is going to help avoid a lot of that downward consequences as a result of TBI. Dr. Insel. We are on it. ELECTRONIC HEALTH RECORDS Mr. Kennedy. And they show literally if you do not give it within the first 24 hours, you give it 72 hours later, the effectiveness diminishes dramatically. To go to David Obey's question about the registries and clinical studies, tell us about how the new health bill and IT with the health bill offers us an opportunity, Dr. Collins, to have gene banks and registries of identify data to essentially do a lot of this that we are currently doing through clinical studies, but to really do it through the new health system. Dr. Collins. Well, we desperately need better systems to do those kinds of large-scale research projects and, frankly, in this Country, we have been significantly impeded by the lack of electronic health records. It is very difficult to do thorough, accurate, efficient, cost-effective studies when everything is scribbled on bits of paper and it is very hard to sort out exactly what is in the medical record at all, if you can even find it. So having the opportunity to see our health care system evolve into an electronic framework is going to help enormously. But there are a number of issues that we are engaged in here to make sure that we get the most out of this. There is whole term called meaningful use---- Mr. Kennedy. Are you consulting with those IT folks on this? Dr. Collins. Yes, we are. Yes, we are. Obviously, one of the hopes is that that meaningful use will be defined for the standard medical record so that it is optimized for research questions to be posed. Obviously, this needs to be done, and shall be done, in a fashion that protects privacy and adheres to standards of informed consent, but I believe that those are pathways that can be negotiated. And we are really looking forward to the chance to greatly enlarge the ability to survey exactly what are the causes of illness by potentially having a much more robust system for doing so with the electronic record. Mr. Obey. Mr. Cole. BIOMEDICAL RESEARCH IN THE UNITED STATES Mr. Cole. Thank you, Mr. Chairman. Thank you, Dr. Collins. I want to ask you a series of questions just, frankly, will be easier if I just sort of laid it out, and then maybe you could educate me a little bit, since I am new to this Committee and certainly new to this topic, but very interested. If you could, could you compare our national effort with other countries? Where would you rank us, obviously? Second, what percent of biomedical research done in the United States is actually done by NIH or something you fund? And, again, what percentage would that be nationally, if you know? And, finally, is there some realistic way--you implied in an earlier question that obviously you are at the foundation of a lot of very profitable research for people--that some of the money, some of the profits generated down the line in the private sector could, in some realistic way, flow back to you for the continuation and the augmentation of basic research? Not eliminating our role, but generating additional resources for you to do what you obviously do very well at NIH? Dr. Collins. Those are great questions, Congressman, and I would be happy to quickly go through them. As far as the national effort of the United States in biomedical research, I think it is fair to say we continue to lead the world, but that leadership is certainly being challenged substantially now by other countries--Europe, Japan, and increasingly China and India. And our trajectory in terms of the support and the numbers of individuals working in the field has tended to be fairly flat, while those are going up rapidly. We were grateful to hear the President announce a year ago an intention to raise the U.S. investment in research and development to 3 percent of GDP, which would be a big shot in the arm, but no timetable has been set for that. The time is right, certainly, in terms of taking advantage of opportunity and of investigators who are ready to come forward with their best ideas and pursue them. In terms of research that goes on in this Country, if it is research done in academia, that is, in our great universities and institutes all over the Country, and it is biomedical research, almost all of that is supported by the National Institutes of Health, with a healthy contribution also from philanthropy. Certainly, the private sector--I think I mentioned numbers a little bit ago--invests about $56 billion a year in biomedical research; NIH, at $31 billion is about 40 percent of the total, but in a good partnership. And your third question about profits that might actually be able to feed back in some way to support the research that goes on at NIH is something we have thought about. In this new model, where we might have a partnership where academic investigators get more involved in the front-end of developing new therapeutics, that will result in some identification of intellectual property. That intellectual property can then be licensed to a private company that is interested in taking it to the next step and all the way to FDA approval. And if a drug then actually gets approved and for which profits are made, some royalties stream back to the NIH would be highly appropriate, and most companies I have talked to are comfortable with that model as a good way to get the job done. Mr. Cole. Thank you. Thank you very much, Mr. Chairman. Mr. Obey. Mr. Ryan. RECOVERY ACT INVESTMENTS Mr. Ryan. Thank you, Mr. Chairman. I just wanted to see if you can kind of outline--we put a lot of money into the Recovery Act, and I think you touched upon it a few times here. Can you just talk about, in your estimation, I know a lot of that money was needed to be spent years ago, and we were playing a lot of catch-up here in good measure to the leadership from Mr. Obey, but can you talk a little bit about how you feel the most impactful investments through the Recovery Act, where that went, what it is doing, and how we can--like you said, it is a marathon, not a sprint, and how we can continue to build on it over the years? Dr. Collins. Well, because this was such a significant investment, the list of projects that were possible because of it is much longer than I can fit into this three minutes, but let me give you a couple of highlights of maybe signature initiatives---- Mr. Cole. I mean, things like we want to go out and there is a bid across the Country. Stimulus bill is not working, some people say. Well, all the metrics show otherwise. But if you could give us some tangible information on what would resonate with people, what they would grasp onto. Dr. Collins. So Recovery Act dollars from NIH in fact went out to all 50 States, and we are in the process--quite clear we are creating or retaining 50,000 high-quality jobs in the biomedical research enterprise, which is a significant contribution. In terms of science that this supports that is going to have a large impact on health, I have mentioned the Cancer Genome Atlas as a rapid acceleration in the ability to understand exactly at the molecular level what is going on in cancer. Similarly, with heart disease. We have the Framingham study, which has been going on for three generations, which now, because of these dollars, is possible to move into a phase of getting even more detailed information about the environmental and genetic risk factors for cardiovascular disease. In the area of HIV/AIDS--and Dr. Fauci could tell you more details about this--this money has made it possible to tackle a couple of very novel and potentially very valuable ways to reduce the incidence of new cases of HIV/AIDS by identifying individuals who are infected and do not even know they are, and starting them on treatment which will reduce the likelihood that they can transmit the virus to others. Autism. The effort now is funded by the Recovery Act to obtain the complete DNA sequence of 300 cases of autism and their parents to finally really understand what are the genetic contributions to a disease which clearly can run in families, so there must be something going on there. All of those are things that we could not have done without Recovery Act dollars to provide that real opportunity to tackle things that are risky and expensive, but are potentially groundbreaking. Mr. Ryan. I appreciate it. Kent State University, I was there a couple weeks ago. They got a significant amount of money from the stimulus bill from NIH, and I just want to say thank you, because there were a lot of folks there who were working in hiring people in Portage County, Ohio, because of what we did through the stimulus bill and what your work is. So I want to thank you for that as well. Thank you. Dr. Collins. And I could have mentioned the pandemic flu effort, which also was greatly benefitted by the Recovery Act dollars. Mr. Obey. Mr. Kennedy, you had one question? HEALTH CARE REFORM AND RESEARCH Mr. Kennedy. Yes. Dr. Collins, you mentioned a new paradigm in terms of translational medicine perhaps working with the private sector. I would like to ask you, with this new health bill, the elimination of preexisting condition, the elimination of lifetime and annual caps puts a big onus on insurance companies now to come forward and develop models of care for different disease groups. How they put that together will ride on what the evidence-base is on how to best treat and care for groups. That is going to involve you talking to the President's assembled people who are going to roll this out, but also to insurers and, like is said, that public-private partnership as to how they best meet their obligations in the most efficacious way. And, Tom, how do you think to do that, when it is not necessarily medical and clinical for autism, Alzheimer's, you know, cognitive disorders, but functional? And how do you have a reimbursement system that is not based on the old model? And what are you doing now to help instruct them so they are not just blocking--which they are doing now--and suing against the system? But how do you help them meet their obligations by showing them what the evidence-base is? If you read this Sunday's New York Times about the veteran, we are not even getting it right in the DOD and VA, and we are supposed to have the best in cutting edge of treating cognitive disorders as a result of TBI and PTSD, and it is a disaster if you read or take anything from that New York Times cover story on returning warriors. So I am wondering--hopefully, that is not the model, and I do not even know whether you guys are consulting with the VA or DOD. Dr. Collins. We are. But I think your question is even broader in terms of the health care of the Nation, and how are we going to come up with systems that work in the new health care reform environment. One of the things we are doing in that regard that might be worth mentioning is to try to work with HMOs that already have electronic medical record and are effectively well set up for experiments that we might be able to run in a research way to try to understand how could you provide different kinds of incentives to providers to be able to improve outcomes. Because that is the big sort of missing piece in much of where we hope to go. It is great to have all the data, and we generate a lot of that data to tell you what works and what does not. But how do you get it implemented and how do you implement it in a way where you have a health care system that actually responds to the right incentives instead of the wrong ones? Mr. Kennedy. [Remarks made off microphone.] Are outcomes quality of life or outcomes blood pressure? Dr. Collins. Oh, I would think quality of life and blood pressure, because they are connected. Mr. Kennedy. Yes, but HMOs do not measure--or insurance do not measure quality of life. Dr. Collins. And you are right that we need better measures of whether quality of life is actually considered, and how would you define that in a rigorous way. Actually, we have a Common Fund Roadmap project on that, where patients actually are able to define, from their perspective, whether they are being benefitted by an intervention or not, which is often left out of the equation. Mr. Kennedy. Tom. Dr. Insel. If I may. I think you put your finger on what is going to be a very important challenge over the next couple of years. We are in a very interesting point in time for at least those with serious mental illness. We have the advent of parity for the first time as it rolls out--in spite of some suits, I think it is rolling out--and we have health care reform, which is going to have a tremendous impact for those with mental illness because of parity. What has been such a struggle for us is so much of the cost and so much of the challenge for those with serious mental illness is outside of the health care system. They are incarcerated, they are homeless, or there are problems that play out in the school system, where we just do not see them in the health care system and we do not think about them through health care dollars. And one of the challenges will be to figure out how do you throw that net so that all of those needs, as well as the needs of caretakers, get taken into account. We are in discussions with people and it has been a very interesting process, partly because of the parity in health care reform advances that we now are in discussions with payors, as well as everyone else, to think about what is the evidence that you need to make that extension? What would it take? So I think you know about our Recovery After an Initial Schizophrenia Episode (RAISE) effort, which was really developed almost in the reverse; started with the payors and said what would you need for someone with an acute psychotic break to cover everything, to cover all the things that we know are necessary for recovery? And what kind of evidence could we provide to you that would make you come to the table and say this is a good buy for us, this is worth supporting? And we are rolling this out; it is a large $25 million effort done with the Recovery Act funds, and we think this is actually going to be transformative for those people who end up being huge costs if we do not get it right on the front end. Mr. Kennedy. Thank you very much. Mr. Obey. Mr. Tiahrt. Mr. Tiahrt. Mr. Chairman, I ask unanimous consent to submit some questions for the record. Mr. Obey. Sure. Mr. Tiahrt. Thank you. Mr. Obey. Let me ask just two questions. Do not worry, you are not missing much. [Laughter.] NEW STEM CELL LINES Mr. Obey. First of all, would you explain the significance of the story that appeared in the Post this morning with respect to stem cell? Dr. Collins. Yes, I would be happy to. As you know, President Obama, a little more than a year ago, issued an Executive Order indicating that stem cell lines--we are talking about human embryonic stem cell lines--that have been derived since August 2001--which is when the Bush Executive Order took effect--ought to now be considered for Federal funding if they met certain standards as far as the way in which those lines were developed in terms of the consent, especially, to be sure that that was ethical. NIH was charged with putting together guidelines about how to do that review of stem cell lines, and those went into effect in July, and we have been receiving the information from many stem cell line developers since then and, as of today, there are 64 lines that have been approved. Today's news was about two particular lines that go by the names H7 and H9, which were derived a long time ago, more than 10 years ago, and were heavily utilized by researchers between 2001 and now, and for which there was a lot of data. Those lines had not been submitted to NIH for review until about two weeks ago; there were some complications in terms of finding all the documentation. The materials were submitted, we reviewed them rigorously, and yesterday I approved them as now being appropriate for support by Federal funding. Those two lines actually accounted for a substantial amount of the publications that have occurred in this field up until now. So many people in the research community were hopeful for this outcome and I am glad to say we were able to get there with complete adherence to rigorous standards of consent, which were part of the Obama Executive Order. DR. RUTH KIRSCHSTEIN TRAINING AWARDS Mr. Obey. Okay, one other long observation. As you know, Dr. Ruth Kirschstein visited this Subcommittee many, many times. She was a legendary scientist and administrator at the National Institutes of Health, and she died October 6th of 2009 after a public service career that spanned more than 50 years. Dr. Kirschstein worked on polio research, made history as the first woman to head an NIH institute, and later served as Deputy Director and Acting Director of NIH. She was a pioneer. A significant part of her legacy is the way she served as a champion for the advancement of women and minorities in biomedical research. She was a strong advocate for research training, especially interdisciplinary pre-doctoral programs and programs to increase the number of minority biomedical scientists, physician scientists, and scientists trained in emerging or evolving areas. In 2002, as a fitting tribute to her many years of exceptional service, particularly in the area of research training, Congress renamed the National Research Service Award Program in her honor. The Ruth Kirschstein National Research Service Award is an important tool to ensure we have a pipeline of future investigators ready to take over as the current workforce continues to age and move toward retirement. In 2001, NIH agreed to work towards increasing entry-level stipends under this program to $45,000 a year. Currently, NIH pays just under $38,000 a year despite their advanced degree in specialized technical skills that would allow them to earn considerably more in the open market. I understand that the President's budget proposes an increase of 6 percent in stipends under that program. How does that fit into your efforts to ensure a robust pipeline of young investigators? What is the current NIH policy for cost of living support in this program? And, more generally, how are we doing in attracting and keeping the next generation of biomedical researchers? Dr. Collins. Well, Mr. Chairman, I appreciate your citation of Dr. Kirschstein and her role at NIH. It is impossible to overstate the remarkable impact that she had on the institution and on many of us personally, and she is greatly missed. We are having a symposium on May 17th, inviting many of the Ruth Kirschstein awardees to come back and talk about the science they have done in order to recognize the way in which her contribution has had a very specific personal effect on each of them, and we are expecting that to be a day of great celebration of her legacy. In terms of what we are doing about training grants, yes, the President's budget does propose a 6 percent increase, which I think is long overdue. If one looks at the stipends that have been proposed by NIH for such trainees, they have remained essentially flat for a long period of time, even as inflation has been eating away at the buying power. This has--I can tell you, because I recently met with the National Postdoctoral Association in Pennsylvania. This news of at least a proposed increase was a big morale booster for a group that has begun to worry about just how valued are they. Being in that kind of training circumstance, you can imagine why that might feel a little uncertain. You are not yet independent. You have a Ph.D., so you know some stuff, but you are not making much money and you are not necessarily sure where you are going. And to get that kind of pat on the back, saying we value you and we think you are a bit underpaid-- probably a lot underpaid, but we are going to try to do something about it--was well received. How are we doing in terms of recruiting? I would say okay, but not great. And certainly when you look at the way other countries--for instance, China and India--are doing as far as bringing new talent into the scientific research community, they are surpassing us in terms of their reach and their ability to encourage people to find their careers in this path, and we are flagging a bit. More particularly, I am concerned about the fact that our trainees do not represent the complexion or the diversity of our Country, and we need to work harder on the diversity issue and recruiting more disadvantaged individuals into this area, because we need the best and the brightest no matter what their background happened to be; and some of our programs have succeeded at that and some have not, and we are looking at a new set of ideas through a Pathfinder Award to try to improve that outreach to groups that are traditionally not represented in our workforce and should be. So we have a lot of work to do here between the graduate students and the post-docs, the clinical investigators, the M.D. Ph.D.s who I met with this past Saturday, who are also concerned about their future but enormously energized about the scientific potential; and this is one of my personal priorities, to be sure that we are not passing up the chance to be filling our pipeline with this next generation. And there are risks here, because they do hear their elders wringing their hands and complaining about the fact that it is hard to get a grant funded, and that one chance out of seven of having your grant actually receive funding may be a bit discouraging to some of the young people; and a few of them who met with me in Chicago talked about being on the brink of going off to do something else because of their uncertainty about whether there was a place for them. We have to work hard on that to be sure that they do see there is a place, even in difficult budget times, and hoping that, in the longer term, we might ultimately get to a point where we have stable, predictable kinds of trajectories for medical research instead of the feast and famine up and down experience, which has been pretty hard on everybody, but specifically on young trainees. TEN MOST IMPORTANT ADVANCEMENTS Mr. Obey. One last question. There is a very sour mood in the Country about a lot of things these days, and when that occurs people tend to overlook some very important things that have occurred in society and in government through the years. I mentioned earlier that I have been on this Committee since, I do not remember, 1973 or 1974, one of those, and the way politics works, I guess, if you produce something that is physical and tangible, like a missile or a space vehicle, a shuttle, people can see visibly what they get for their tax dollars. But in a field like health care, there is not much that you can put your hands on to say, yes, this is what improvement in cancer research looks like. I mean, you cannot touch it. It is very different. And I think it is important that taxpayers understand that a lot of times, in lots of places, their tax dollars do some very good things. The problem is also that you cannot see that in any one year. But if you step back and look at it over time, then you can see some major changes that have occurred. What I would like you to do--and I do not expect you to do it now, but I would like you, at least for the record, to do this. If you take a look at what has happened because of NIH funding through the years, what are the ten biggest improvements, what are the ten most important steps forward? What are the ten ways in which the public's health has been advanced because of what NIH and the researchers that it funds all around the Country have produced? If you can prepare that for the record, that would be useful. Dr. Collins. I would appreciate the chance to do that. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8233B.119 [GRAPHIC] [TIFF OMITTED] T8233B.120 [GRAPHIC] [TIFF OMITTED] T8233B.121 [GRAPHIC] [TIFF OMITTED] T8233B.122 [GRAPHIC] [TIFF OMITTED] T8233B.123 [GRAPHIC] [TIFF OMITTED] T8233B.124 Dr. Collins. Just very quickly, but not the full response that I know you expect, if one looks at what has happened to death rates, and the fact that we have seen longevity improve by one year about every six years, and that can be tracked to NIH research in a very large extent. That is a pretty good general indicator. Disability is dropping off. In this document (NIH: Turning Discoveries Into Health) that we left for you, we tried to capture some of these others, such things as, for instance, what has happened with HIV/AIDS, which used to be a death sentence and which now the average person diagnosed at age 21 can expect to live to age 70. When you look at something like deafness, where children born with congenital deafness would have cost the Country, in the past, $1 million of extra educational efforts and would therefore have had many limitations on them, now, with the ability to treat that, you can in fact expect, and we have seen for 50,000 kids, that they can be mainstreamed because of the ability to repair the problem. Heart disease dropping by 60 percent in the course of the last 30 years in terms of the deaths is another very good one to cite. There is a lot there. But, you know, you are right, Mr. Chairman. I do not think that that is a story that is often told. It does not happen overnight; it happens over years. And when it does happen, people may not realize why it happened, and much of it is resting upon this foundation of medical research that this Subcommittee has supported down through the years. Mr. Tiahrt. Can you put that all in 28 seconds, please? RECOVERY ACT FUNDS Mr. Obey. What it really amounts to is--I mean, it is 35 years. It is a generation. And I think it is important people understand what has happened from one generation to another, what the taxpayer expenditures finally produce. The other question I would have is you mentioned feast and famine. Some people might take that remark to suggest that that demonstrates that we made a mistake when we put the funding in that we did for the recovery package. So, again, I would like to know would it have been better had the Committee not provided that money over the last two years? Is it worth the discombobulation that you have because it is a two-year temporary shot in the arm? And you know what I am getting at. Dr. Collins. I do. Mr. Obey. Is it worth it? Was it worth it? Was it a mistake? And is it worth the complication, I guess I would put it that way? Dr. Collins. Well, Mr. Chairman, thank you for the opportunity to correct any misapprehension that might have arisen from my use of that particular phrase. It has been a wonderful investment in medical research. This $10 billion came at a time where there was a great pent-up demand and need, and a whole series of innovative ideas that were not possible to support; and they came forth in great numbers, and scientists supported by the Recovery Act are doing remarkable things right now, and we will see the consequence of those; not overnight, because science does not operate overnight, but in the long- run, as having been a very wise investment in advancing research. It does create some stresses for the system when this comes forth in a two-year period and we cannot see sort of a more stable trajectory, and we are going to be experiencing those stresses, I fear, in fiscal year 2011, but it was worth every bit of it to get the research done that has been possible to support through the Recovery Act. Mr. Obey. Any other last questions? ALZHEIMER'S FUNDING CARE VERSUS CURE Mr. Kennedy. On those questions that you would have Dr. Collins come back with, if there could be--we are spending a lot of money on the care of people with certain illnesses. I am thinking Alzheimer's is one. Lots and lots of money is going to continue to go and it is going to go up. However, if we put a fraction of the money that we are going to be putting into long-term care into researching the cure, or even researching delaying the onset of Alzheimer's, how does that budgetarily pay for itself by averting costs averted from the actual dollars that we would otherwise be spending in the costly care of folks with these illnesses? If you could try to figure out a way how we put some metrics to that. [The information follows:] [GRAPHIC] [TIFF OMITTED] T8233B.125 Mr. Kennedy. And on Dr. Kirschstein, I too, David, want to just say what a pleasure it was working with her, and the fact that we were able to, with her help, put the network of basic behavioral research together, and encourage you to try to get med schools to incorporate behavioral education into their medical school curricula. I know that is a priority of yours. If you could keep the pressure going on our State boards to include that in their medical school curriculum. Dr. Collins. Point well taken. Mr. Obey. Thank you gentlemen. Thank you all. 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S.................................................... 279 Duncan, Hon. Arne................................................ 59 Fauci, A. S...................................................... 279 Insel, T. R...................................................... 279 Rodgers, G. P.................................................... 279 Sebelius, Hon. Kathleen.......................................... 145 Solis, Hon. Hilda................................................ 1 I N D E X ---------- Department of Labor Page Chairman's Opening Remarks....................................... 1 Secretary's Opening Statement.................................... 1-6 Secretary's Written Statement.................................... 7-23 Green Jobs....................................................... 24/38 G-20 Summit...................................................... 25 Bureau of International Labor Affairs............................ 27 OSHA Ergonomics Regulation....................................... 27 Worker Protection................................................ 28 OSHA Staffing.................................................... 29 Racial Disparities in Unemployment............................... 29 Ex-Offender Grants............................................... 30 Ratio of Job Seekers to Jobs..................................... 31 Number of Federal Employees...................................... 31 Foreign Government Subsidized Employment......................... 31 DOL Budget Request............................................... 32 Addressing Chronically Unemployed................................ 32 Job Sectors Facing Contraction................................... 34 Rebounding Job Sectors........................................... 34 Job Sector Contractors........................................... 34 Shortages in Traditional Energy Industry......................... 37 Continuing Education............................................. 37 Employee Readiness To Enter Job Market........................... 39 Extension of Retirement Age...................................... 40 Protecting Migrant Farm Worker Children.......................... 42 Exposure of Children to Hazardous Materials...................... 43 Leveraging Stimulus Funding...................................... 44 Reemployment of Highly-Skilled Workforce......................... 44 Training for High-Growth Industries.............................. 45 Improving Job Loss Picture....................................... 46 Conclusion....................................................... 47 Questions of Record.............................................. 48-58 Department of Education Chairman's Opening Remarks....................................... 59 Secretary's Opening Statement.................................... 59-66 Secretary's Written Statement.................................... 67-75 Pell Grant Programs Costs........................................ 76 Rising Tuitions and Cost to Students............................. 76 Financing Pell Grants and Direct Lending Proposal................ 77 Direct Lending Proposal-Terminating Lender Subsidies............. 77 21st Century Community Learning Centers.......................... 78 Impact of Economy on After-School Programs....................... 78 After-School Programs............................................ 78 Competitive Grant Programs and Rural Districts................... 80 Turning Around Low-Performance Schools........................... 80 School Improvement Intervention Models........................... 81 Helping Struggling Populations................................... 81 Charter Schools in Rhode Island.................................. 82 Adult Literacy................................................... 82 Pell Grants and College Tuition.................................. 82 Adult Literacy and Training...................................... 83 Student Loan Interest Rates...................................... 84 Even Start Program--Family and Adult literacy.................... 84 Teacher Support and Chronic Low-Achieving Schools................ 85 Holding Schools, Districts and States Accountable................ 86 Funding for Low-Achieving Schools................................ 86 Support for Teachers............................................. 86 Increased Resources, Shared Responsibility....................... 87 Programs Flat-Lined in FY 2011 Budget............................ 87 Indian Education................................................. 88 Increased Funding in Consolidations.............................. 88 Graduation Rates of NCAA Athletes................................ 89 Real Estate Market Impact on School Funding...................... 89 Education Funding as Investment in Nation........................ 90 Disparities in CCAA Graduation Rates............................. 90 National Education Policy Discussions............................ 91 Formula-Driven Stimulus Bill Funding............................. 91 Helping Schools Not in Formula Calculations...................... 91 State Fiscal Stabilization Funds................................. 92 Tax Credit for Privately Schooled Students....................... 92 Fiscal Constraints on National School Districts.................. 92 Federal vs. Local Share in Education Funding..................... 93 Addressing Low Graduation Rates of NCAA Athletes................. 94 Native American and Alaska Native Students Education............. 94 Common Course Standards.......................................... 95 Texas Proposed Textbook Changes.................................. 95 48 States Working Toward Common Standards........................ 95 ESEA Reauthorization............................................. 96 Shepherd Program--Poverty and Human Capability................... 96 Effective Teachers and Leaders Funding........................... 96 Educational Opportunity Equity Commission........................ 97 Ensuring Educational Equity...................................... 97 Teacher and Principal Equity..................................... 98 Schools as a Reflection of Community............................. 98 Promise Neighborhoods............................................ 99 Shift Toward Competitive Programs and Consolidations............. 99 Educational Technology State Grant Programs...................... 99 Income-Based Repayment of Student Loans.......................... 100 TRIO, Gear-Up, HEP and Camp Program Requests..................... 100 College Access and Completion Funds.............................. 101 Social and Emotional Learning Programs........................... 101 Social, Emotional Development and Decision Making Ability........ 101 Teaching Students To Understand Emotions......................... 102 Early college Enrollment and Dual Enrollment Programs............ 102 College Pathways................................................. 103 Pell Grant and Early College Programs............................ 103 Disproportionality in Special Education.......................... 103 Early Learning Challenge Fund.................................... 103 Even Start....................................................... 104 Education Jobs Saved by Recovery Act............................. 105 Education Jobs Bill.............................................. 105 Title 1, ESEA Funds for High-Poverty Schools..................... 106 School Improvement Grants........................................ 106 Title 1 Funding.................................................. 106 Addressing Inequality in Education............................... 107 Race to the Top Application Process.............................. 107 Focusing Increased Resources on Inequality....................... 108 History and Civics Education..................................... 108 Budget Increased To Promote Well-Rounded Education............... 109 Civil Rights..................................................... 109 Proposal for Direct Lending for Student Loans.................... 109 Proposal To Increase Pell Grant Funding.......................... 110 Student Loan Reform.............................................. 110 Individuals With Disabilities--Grant to States................... 111 Teachers Recruitment and Retention............................... 111 Teachers Incentive Fund.......................................... 112 Promise Neighborhoods............................................ 112 Move Toward More Consolidation and Competitive Programs.......... 113 Dropout Rate and College Completion.............................. 113 Focus on Achievement Gaps........................................ 114 Assessment of No Child Left Behind............................... 114 Focus on Growth, Gain; Reward Success, Excellence................ 114 Flexibility and Accountability................................... 114 Proposal To Move to Student Loan Direct Lending.................. 115 Robotics Competitions............................................ 116 Incentives and Public-Private Partnerships....................... 116 Partnering of School Districts To Share Services................. 117 Pell Grants...................................................... 117 Savings From Direct Lending...................................... 117 IG Audit of Reading First........................................ 117 Eliminating Conflict of Interest in Competitive Awards........... 118 Actions To Prevent Conflicts of Interest......................... 118 Origins of U.S. Deficit.......................................... 119 Chairman's Closing Remarks....................................... 119 Questions for the Record........................................120-143 Department of Health and Human Services Chairman's Opening Remarks....................................... 145 Witnesses Opening Statements....................................147-149 Witnesses Written Statements....................................150-161 Health Care Reform............................................... 162 Cost of Insurance Premiums....................................... 162 Individual Mandates.............................................. 168 Medical Loss Ration.............................................. 168 State Insurance Commissioners.................................... 169 Single-Payor System.............................................. 170 Medical Error Rates.............................................. 171 Medical Advantage................................................ 171 Diversity in Health Professionals................................ 172 High Risk Pools.................................................. 175 Prohibition on Lobbying With Federal Funds....................... 176 Prevention and Wellness Funding.................................. 177 Reducing Caesarean Births........................................ 178 Increasing Birthing Centers...................................... 178 FMAP Formula..................................................... 179 Health Care Fraud................................................ 179 Medicare Reimbursement........................................... 180 Hospital Acquired Infections..................................... 181 Medicare Reimbursements Rates.................................... 182 Health Insurance Costs........................................... 184 Prevention and Public Health Fund................................ 185 Prevention and Mindfulness....................................... 185 Primary Care Physician Shortage.................................. 186 Health Reform Compliance and Enforcement......................... 187 Prevention Issues................................................ 188 Health Care Reform............................................... 190 Unfunded Programs in Health Reform............................... 192 Underage Drinking................................................ 194 Section 317 Vaccination Program.................................. 195 Projected Coverage Rates......................................... 195 Physician-Owned Hospitals........................................ 196 Children's Health Task Force..................................... 196 Forum Health Bankruptcy.......................................... 197 Food Safety...................................................... 198 Questions for the Record........................................200-277 National Institutes of Health Chairman's Opening Statement..................................... 279 1Witnesses Opening Statement....................................281-285 Witnesses Written Statement.....................................286-308 Comparative Effectiveness Research............................... 309 Adult and Embryonic Stem Cells................................... 310 Sickle Cell...................................................... 311 FY 2011 Funding.................................................. 313 Pancreatic Cancer................................................ 316 Class B Dealers.................................................. 317 Breast Cancer Mammography Guidelines............................. 317 Funding for Comparative Effectiveness Research................... 318 Private Sector Innovations From NIH Investments.................. 319 Priority Setting for Resource Allocations........................ 321 Pediatric Cancer Research........................................ 322 Food Allergies................................................... 323 Pediatric Diabetes............................................... 324 Environmental Causes of Illness.................................. 326 Mental Illness Among Veterans.................................... 328 National Cancer Institute Clinical Trials........................ 329 Biodefense Research.............................................. 331 Behavioral Research.............................................. 332 Coordination of Research......................................... 334 Traumatic Brain Injury........................................... 335 Electronic Health Records........................................ 336 Biomedical Research in the United States......................... 336 Recovery Act Investments......................................... 337 Health Care Reform and Research.................................. 339 New Stem Cell Lines.............................................. 341 Dr. Ruth Kirschstein Training Award.............................. 341 Ten Most Important Advancements.................................343-349 Recovery Act Funds............................................... 350 Alzheimer's Funding Care Versus Cure............................351-352 Questions for the Record........................................354-437